Helen Whately is the Conservative MP for Faversham and Mid Kent.
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On financial sustainability, I acknowledge that, as my hon. Friend mentioned, hospices contend with significant financial pressures, including rising energy costs. Charities, including hospices, have already benefited from the energy bills discount scheme. Furthermore, hospices may be entitled to a reduction in VAT from 20% to 5%, and to exclusion from the main rate of the climate change levy on the energy that they use for non-business purposes, should they meet the scheme criteria.
Full debate: Hospice Services: South Devon
My hon. Friend has made an extremely good point. Now is the moment for us to go full steam ahead with our transition away from fossil fuels. We are investing in nuclear, we are accelerating our progress on renewables, and we are boosting energy efficiency in homes across the country. This is how we will bring bills down, improve our energy security and tackle climate change.
Full debate: Oral Answers to Questions
The Government are committed to ensuring that the whole of the United Kingdom benefits from our investment in renewables and our transition to net zero and the growth that that affords us, and I am happy to look into the matter that the hon. Gentleman raised.
Full debate: National Infrastructure Projects
I hope it will not come as a surprise to hon. Members that the Government take their world-leading environmental commitments very seriously and are determined to achieve our climate change and environmental targets, including to improve the UK’s air quality. That is why, to help achieve net zero and improve air quality, the Chancellor announced back at Budget 2020 that the Government will reduce the entitlement to use so-called red diesel from April this year.
Red diesel is currently used for a wide variety of purposes, such as powering bulldozers and cranes in the construction industry, as well as in the refrigeration section of lorries, in off-grid heating and in agriculture. It accounts for around 15% of all the diesel used in the UK and, as such, is responsible for the production of nearly 14 million tonnes of carbon dioxide a year—that is nearly 3% of total UK emissions. I am therefore quite surprised to hear such opposition from hon. Members from the Scottish National party, the Liberal Democrats and Labour, as well as from hon. Members from Northern Ireland, considering the importance of tackling climate change and reducing emissions.
Importantly, the Government have also heard from developers of alternative technologies—cleaner alternatives to red diesel—that the low cost of running a diesel engine on red diesel currently acts as a barrier to entry for greener alternatives. This widespread use of red diesel is actually counterproductive in terms of our ambitions to tackle climate change, reduce emissions and reduce pollution overall.
Although the construction sector, and mining and quarrying, which my right hon. Friend the Member for East Yorkshire (Sir Greg Knight) mentioned, argued throughout the consultation process that they should be exempt, their case was simply not compelling against our overall objective to incentivise greener alternatives and greater fuel efficiency and to shift to a position, which can only make sense, where the appropriate level of tax is paid on such a polluting and harmful fuel to reflect the harm that using it causes. However, as I say, we did listen and consult substantially on this proposal; we heard among others from the construction sector and from business representatives in Northern Ireland. We did listen, but we had to make the decision that this is part of an overall direction of travel where we are committed to tackling climate change and the harmful effects of pollution.
For those who said that the change will not make a difference to the environment, or will backfire, as I mentioned it is about incentivising the development of alternatives. Alternatives are already being developed. Specifically to support that, the Government have doubled the funding for energy innovation through the £1 billion net zero innovation portfolio. The Department for Business, Energy and Industrial Strategy recently announced £40 million of funding for the red diesel replacement competition, which is part of that portfolio, to specifically grant funding to projects that will develop and demonstrate lower-carbon, lower-cost alternatives to red diesel for the construction and mining and quarrying sectors.
My apologies—I thought that I had until 5.45 pm. In that case, I will wind up by saying that I thank hon. Members for their contributions and hope that they will recognise the importance of the tax reforms for our ambitions to tackle climate change and reduce pollution.
Full debate: Rebated Fuel Rules: Construction Industry
As context to this debate and to the plastic packaging tax overall, I think that we can all agree that plastic waste is a significant and serious environmental threat, because plastics do not decompose. They can last centuries in landfill sites. With our commitment to reach net zero while driving jobs and growth, and our pledge, through the Environment Act 2021, to leave a better world for future generations and build back greener, the Government are determined to use our battle against pollution and climate change to make a positive difference to people’s lives and the wider economy. That is why we have been focused for some years on developing the right incentives, so that businesses can play their part in supporting us in the green economic transition.
Full debate: Taxation: Silage Film
The Government’s heat and building strategy announced £3.9 billion of funding to decarbonise buildings over the next three years. This included £1.8 billion of support for low income households. I am sure that my hon. Friend will be pleased to hear that her constituency was recently allocated £5.2 million to retrofit low-income homes.
Full debate: Levelling Up: National Retrofit Strategy for Homes
My hon. Friend is absolutely right say that we need to have the right skilled workforce for our transition to net zero, and training is part of that. This year we have provided £6.4 million to help 18 training providers to train around 8,000 people, and our £2.5 billion funding for the national skills fund includes funding for employer-led boot camps. I would be very happy to meet her to discuss the part that SGS College and the Active Building Centre in her constituency could play in making sure that we have the workforce we need for the net zero transition.
Full debate: Levelling Up: National Retrofit Strategy for Homes
The green homes grant and its associated scheme for the Chancellor’s plan for jobs saw £1.75 billion invested in improving more than 100,000 homes. We are now bringing in a more targeted replacement, the home upgrade grant, to support low-income households, and that received £950 million at the spending review. We will continue to support low-income households to ensure that they become more energy efficient, which is good for keeping bills down and an important part of our net zero transition.
Full debate: Levelling Up: National Retrofit Strategy for Homes
To help ourselves achieve net zero and improve UK air quality, we are reducing the entitlement to use red diesel, which currently enjoys a duty discount, from next April. The full duty rate more fairly reflects the damaging impact of diesel emissions, and will incentivise the development of greener alternatives.
Full debate: Red Diesel Fuel: Planned Tax Changes
We recognise that this is a significant change for some businesses, but we have consulted on it since it was first announced in 2020. Those whom we have consulted include representatives of the construction sector and representatives from Northern Ireland, and the case simply is not compelling in comparison with the importance of reducing our harmful emissions. Red diesel leads to 14 million tonnes of carbon dioxide emissions each year, and we need to incentivise greener alternatives as part of our transition to net zero.
Full debate: Red Diesel Fuel: Planned Tax Changes
My hon. Friend is right to say that drainage boards do really important work. The fact is that the public sector, as well as the private sector, needs to decarbonise. In fact, in a low-lying constituency where there is a great awareness of flooding and climate change it is probably even more important, and I am sure his constituents appreciate the importance of reducing our carbon dioxide emissions. I know that the Department for Environment, Food and Rural Affairs is working with the Association of Drainage Authorities on the point that he makes.
Full debate: Red Diesel Fuel: Planned Tax Changes
I hope that it will not come as a surprise to hon. Members that this is a subject that the Government take seriously and that, as a Treasury Minister, I care about deeply. Much of what we are doing in fact aligns with a wellbeing economy approach. More than that, as a Government, we are clear that the wellbeing of our citizens and the natural environment is a priority as we work to deliver our world-leading climate goals.
Clearly a big part of our work in this area relates to efforts to tackle climate change by achieving net zero, which is part of my brief at the Treasury. The UK’s comprehensive legislative framework for tackling climate change, which revolves around setting carbon budgets, shows clearly how factors other than GDP sit centrally within our economic policy. That approach has been a success. Between 1990 and 2019, under Governments of different colours, the UK has reduced its greenhouse gas emissions by 44%, faster than any other country in the G20. Since March 2021, the Government have committed to invest £30 billion in our green industrial revolution. That spending, along with action on regulation and green finance initiatives, is about keeping the UK on track for our carbon budgets, establishing our long-term pathway towards net zero by 2050.
There has been widespread agreement in the Chamber about acting sooner rather than later on climate change, and specifically acting to prevent future climate change and investing to that end. I agree with the hon. Member for Stirling (Alyn Smith) that it is not a choice of either growth or the environment—it is not either/or but both. Our transition to net zero is a growth opportunity in itself. We expect to see hundreds of thousands of new jobs in the green economy. Not all growth includes consuming finite resources; doing things better can also boost GDP.
On the specifics of the debate, our objective pure and simple is an approach that gives us the very best chance of meeting our climate goals in a way that maximises wellbeing for all—in fact, overall improving the wellbeing of the population of this country. We are thinking differently. We are acting differently. We are investing differently. We do indeed want to do that collaboratively, including by working closely with hon. Members across the House.
Full debate: Climate Goals: Wellbeing Economy
A number of hon. Members asked about the funding of net zero. Taking a step back for a moment, let me say that the net zero strategy sets out our path to net zero by 2050. Overall, we have earmarked £30 billion-worth of investment in net zero, but that is a long-term investment. Net zero funding in this spending review and Budget specifically includes £1.3 billion of energy innovation funding, £1.4 billion of public sector decarbonisation funding, £1.8 billion to help low-income households to transition to net zero, £620 million extra for the transition to electric vehicles and up to £1.7 billion for large-scale nuclear energy. So, as hon. Members can see, there is funding for net zero in the spending review and Budget. In addition, the revised Green Book means that all policy objectives need to align with net zero.
Full debate: Finance (No. 2) Bill