Harriet Cross is the Conservative MP for Gordon and Buchan.
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The Secretary of State, the Minister for Energy and the Minister for Consumers have all said in this House that the National Energy System Operator’s report shows that the Government’s 2030 target will lower energy bills. However, the report itself explicitly says that it does not do so, and the chief executive officer of the NESO told the Energy Security and Net Zero Select Committee last week that it “did not set out” to determine “what bills are for consumers.” Will the Minister explain those inconsistencies and take the opportunity to correct the record?
Full debate: Warm Homes Plan
Does the hon. Lady not recognise that we are in a transition period, which we need in order to get to net zero? Of course, we need to protect jobs, but the transition to net zero is essential.
The cumulative effect of clauses 15 to 18 will sound the death knell for Scotland’s hydrocarbon production in advance, crucially, of the transition—economically illiterate, fiscally incompetent and with industrial suicide as the result. A windfall tax is supposed to be a tax on extraordinary profits, yet the extraordinarily high global oil and gas prices that preceded the introduction of the tax have long since abated. Through these changes, the Labour party jeopardises investment in Scotland’s offshore energies and risks the future of our skilled workforce and our ability to hit net zero while employing those workers. Analysis from Offshore Energies UK shows that the increase and extension of the EPL risks costing the economy £13 billion and putting 35,000 jobs at risk.
The analysis from OEUK also shows a collapse in viable capital investment offshore under these changes from £14.1 billion to £2.3 billion in the period ’25-29. It is increasingly apparent that the Government do not really understand how investment horizons work offshore. They are not on a month-to-month basis; they take years to work up. This loss of economic value impacts on not only the core sector, but domestic supply chain companies, many of whom exist in my constituency, which have an essential role to play in the just transition.
Changes to the EPL will hinder the just transition. The Government argue that the reduction in the rate of the decarbonisation investment allowance to 66% will maintain the overall cumulative value of relief for investment expenditure following the rate increase, reflecting the fact that this relief will increase in value against a higher levy rate. However, the policy still reflects a political choice by Labour to deprioritise investment in decarbonisation. Rather than allowing more valuable decarbonisation relief as the solitary positive by-product of its tax hike, Labour has striven to ensure that there is absolutely no silver lining to this fiscal attack cloud on Scotland’s energy industry.
The simple truth is that the UK state cannot meet net zero or create green growth if Labour’s policies to hack away at investment in both the domestic workforce and the sector are allowed to progress. It is clear that the Labour party is abandoning Scotland’s existing energy sector, and putting at risk the just transition into the bargain. With these changes to the EPL, Labour will be creating the worst of all worlds: it will starve industry of investment, sacrifice the jobs of those who can deliver net zero, threaten energy security, keep energy bills high and harm the economy of Scotland, while at the very same time failing to invest the money required to truly deliver against a green transition.
Full debate: Finance Bill
Our fishing grounds—we are seeing something similar with our farmland—are becoming ever more crowded, with increased pressure for space and with competing and often incompatible uses of the marine environment leading to spatial squeeze. About 37% of the seas around Scotland are now in one of the 240 offshore or inshore marine protected areas. The industry also has to be mindful of the “Will they, won’t they?” potential for highly protected marine areas. Coupled with the expansion of offshore renewable energy, such as wind, tidal and wave, that means that the space for fishing in our offshores is shrinking faster than ever.
Fishing is currently excluded from about a third of Scottish waters. Back in the year 2000, the figure was only 1%, so we can see the scale and pace of change. Yes, we need renewable energy and we need to protect the marine environment—important sites such as Forvie in my constituency show that—but we also need proper consultation on how the fishing industry may be increasingly impacted. Generations of expertise relating to fishing, spawning grounds and species movement must be considered when other decisions are taken. The incoming competing pressures in our seas must not be prioritised over fishing or to the detriment of the fishing industry. The current balance does not feel equitable, despite the value of fishing in producing healthy, sustainable and low-carbon food, contributing to our food security and supporting thousands of coastal jobs around the country.
Full debate: Fishing Industry
I will speak about the impact of the Government’s changes to the energy profits levy on people and businesses in my constituency, and on the UK as a whole, in terms of the energy security the Government are meant to ensure and the Government’s ever-more ambitious decarbonisation targets, which are being put at risk.
North-east Scotland is already leading the charge on renewable energy. We have hydrogen projects in development, wind farms off our shores, and expertise that could and should position us as a global leader on clean, renewable energy technologies. However, a rushed, ill-thought-out transition—to which the EPL contributes—will undermine our efforts. The skills of our oil and gas sector are precisely what we need in order to deliver a sustainable transition. The companies that will be penalised by this levy are the ones that we need to invest in green technologies. Just yesterday I met developers of floating offshore wind farms, and I asked them about the EPL. They hope that one of their projects will involve collaboration with an oil and gas field; the floating wind farm will help to decarbonise the rig, and in return, the oil and gas producer will help to fund the cabling back to shore. However, now they fear that the increasing and extended EPL will jeopardise the oil and gas company’s ability and willingness to invest.
Full debate: Finance Bill
The funding may not be sufficient, the overall energy strategy is incoherent and there is no clarity on the delivery of jobs or any mention of £300 energy bill savings, but surely the Bill offers certainty to the very industry that will deliver the energy transition. That brings me to the strategic statement. One thing that we know for sure is that we do not know all we need to know about what GB Energy will do. As a result, the uncertainty will continue. For communities such as mine in Gordon and Buchan, and for businesses, supply chains and those working in the existing energy industry, that is profound. We need to know how those communities will be brought with us in the transition—if it is, indeed, to be a just transition.
Back in 2016, I founded UK100, a network of local government leaders who are ambitious about shifting their communities and their economies to net zero. It is because of that experience, working with local leaders of all political persuasions across the country, that I would like to highlight the importance of a local-led approach to reaching our net zero targets. GB Energy will be able to play a crucial role in doing so by facilitating and encouraging local authorities to meet the ambitious net zero targets that have been set across the country. People will be familiar with the ambitions of big cities such as Leeds, Liverpool, Birmingham, Bristol and Brighton—to name but a few—but towns and villages in rural and coastal communities have also made those commitments. That is why community energy is so vital, and why it is so much a part of this Government’s overall project and of this Bill.
With no disrespect to the National Lottery’s fund, we need a more strategic approach to the local delivery of clean, home-grown, secure energy. That is the role of the GB Energy company. By working with communities and local people, GB Energy will be able to play a crucial role in building consent and support for clean energy projects, in order to reach our ambitious targets and avoid a backlash to net zero—we have already seen that backlash, particularly driven by some of the attitudes of the Conservative party. We have to bring people along with us and show them how they can tangibly benefit from the transition.
Net zero must not be something we do to people; it must be something we do with people. If we do not work with communities, we will face resistance across the country, but not because people are against tackling climate change. By involving people and showing them how they can tangibly benefit, we will face less resistance and deliver much quicker deployment of the energy projects we need to build. Swaffham Prior, which was mentioned by the hon. Member for South Cambridgeshire (Pippa Heylings), is indeed a valuable project, but we cannot leave the transition to projects of that scale. To support community projects at scale, we need a transformative approach that is about transforming the rules of the market as much as it is about establishing GB Energy. Lastly, de-risking those projects—both at scale and community assets—will be a vital role of GB Energy.
Reaching net zero will be a partnership between the state, the private sector and the community. Government investment to help “crowd in” that private sector and community investment will be crucial. In that context, we often talk about new and developing technologies, but it is crucial not to forget existing, proven technologies.
Full debate: Great British Energy Bill