13:22 Philip Dunne (Ludlow) (Con) [V]

I would also briefly like to thank my colleagues on the Environmental Audit Committee, both past and present, who have been involved in this inquiry, which led to the report that I introduce today. From very early on in our work last year, it became abundantly clear that in creating policies to revive the economy after the devastating impact of the covid pandemic, the Government must take every opportunity to grow back greener—the name of our report. We have a golden opportunity to do so, with the Prime Minister genuinely committed to giving global leadership to this issue this year, as he will be hosting the G7 in Cornwall in four months’ time as well as the largest international conference ever hosted in this country, under the auspices of the United Nations conference on climate change in Glasgow, in nine months’ time.

In November last year, the Government intensified their ambition to meet their targets and obligations under the UN convention and the Paris agreement by increasing their commitments in publishing the nationally determined contribution for the UK, setting an example to the other countries that will be coming to the UK this year by confirming a 68% targeted reduction in 1990-level emissions by 2030—a key milestone on the path to net zero Britain by 2050. When the world congregates here, whether physically or virtually, for COP26, we want the UK to have a demonstrably powerful case of action, not just words, to inspire the rest of the world as to how a major industrialised economy can meet the challenge of climate adaptation.

It is therefore particularly critical that we do not miss the other clear opportunity that presents itself as the Chancellor decides next week which further exceptional fiscal and monetary levers to pull to revive the economy from its greatest contraction in over three centuries. I can put it no more simply than this: we must not repeat the mistakes of the past as we start to recover from covid. We must ensure that the measures we take will also materially help the goal of net zero Britain.

We have much to commend in how the Government have gone about the recovery to date. The Prime Minister’s 10-point plan for a green industrial revolution is a vital step towards the Government’s twin objectives of economic recovery and climate change adaptation. Similarly, the Chancellor’s national infrastructure strategy was accompanied by a revision of Green Book guidance so that investment decisions properly account for overarching Government net zero policy objectives.

These high-level strategies are now being backed up by further key staging posts, such as the energy White Paper, but the pause in progress on delivering Government policy caused by the covid crisis over the past 12 months must be overcome as the detailed plans and policies so vital to delivering on these objectives must be brought forward and implemented at pace and scale. Our Committee keeps receiving confirmation that the private sector is standing by with a wall of money to invest in projects that make a genuine contribution to the economic recovery and to net zero, and they need the demand signals and policy structures in place from Government to do so.

Lastly, I would like to highlight our recommendations on the Bank of England’s response to the economic crisis. I start by thanking the Governor of the Bank and his officials for the constructive approach that they have taken to our work, and by recognising the Bank’s excellent record in highlighting the financial risks from climate change above all other central banks. It was the first central bank to publish its own climate-related financial disclosure.

The Governor of the Bank of England has rightly sought a little more clarity from the Government in the mandate that they set for the Monetary Policy Committee in its conduct of UK monetary policy. Our Committee has recommended that the Chancellor should make explicit that the Monetary Policy Committee should have regard in its work to the Government’s climate objectives, which it already does, but also to their nature objectives. That single, simple step would also assist the Bank in adjusting its corporate bond purchasing policy to support those objectives better in the future, to lead the way in reducing the carbon intensity of the UK corporate sector overall.

Our present challenges in the midst of this pandemic are being addressed by the ingenuity of scientists, the skill of the vaccine taskforce and the heroic efforts of the NHS and all its volunteers in organising the vaccine roll-out at such pace, but I am sorry to say—this will come as no surprise to the House—that there is no vaccine that is proof against runaway climate change. It is a challenge that requires all our effort and ingenuity, and changes in behaviour, to address.

The Government, in their response to the crisis, have shown encouraging signs of promoting a green recovery. Our report points out that there is much more to be done to sustain the recovery in a way that sees the UK set genuinely on a track to net zero. I commend the report to the House.

I will do my best, Madam Deputy Speaker. The Committee’s report highlights the evidence from the Bank of England that we will need a carbon tax of about $100 per tonne by 2030 for a smooth transition of the economy to net zero. If we want to prevent large-scale offshoring of our industry and support the growth of low-carbon manufacturing here in the UK, we will need a scheme of carbon border adjustment. The EU and the USA are already working on this policy, which is both a good and a bad thing. Does my right hon. Friend agree that our presidencies of both the G7 and COP26 are an unmissable opportunity to lead an international approach to carbon border adjustment, rather than risk the imposition of piecemeal protectionist carbon barriers by individual trading blocs, with us on the outside?

I congratulate the right hon. Member and his Committee on this report. I see that it calls for new road projects to be explicitly appraised against air quality, biodiversity and climate change commitments, which I very much welcome. It has now been reported that the Transport Secretary overruled advice from his own civil servants on the need to conduct an environmental review of the planned expansion of England’s road networks. Does the Committee intend to follow up on its report by raising that with the Secretary of State? Does he see a future role for the Committee in scrutinising the environmental impact of the road expansion policy if the Transport Secretary is unwilling to do so?

I thank my right hon. Friend for this report, which highlights the importance of maintaining our net zero target while focusing on our economic recovery. What steps does the report highlight to improve the shortcomings found in the green homes grant?

This is the specific measure that the Government introduced with a view to achieving their objectives of stimulating the economy, meeting net zero obligations and generating jobs. At present, the scheme is disappointing in every respect. It requires a thorough overhaul of its administration, working closely with the industry and contractors to improve its implementation and providing more certainty by extending its duration.

I thank the Chair of our Committee and agree with all that he has said. Does he agree that there is real urgency for the carbon intensity of the Bank of England’s corporate bond portfolio to be cut and aligned with the Paris agreement? Analysis by the Bank itself shows that the portfolio is in step with a catastrophic 3.5° temperature rise, and this is clearly untenable, particularly if the UK aspires to be a credible host of COP26. He has spoken about the failure of the green homes grant. Does he agree that a failure to establish a revised scheme on a multi-year basis would do enormous damage both to businesses and consumers by destroying confidence and trust in any future home retrofit project? I have businesses in my constituency that face going bust because of the incompetence of this scheme.

I thank the hon. Lady for her contribution to our Committee and her characteristically robust portrayal of some of our recommendations. I touched on the Bank of England in my remarks. The pace at which it seeks to adjust its portfolio is a matter for the Bank, but it has agreed to look at this in the response from the Governor, and that is a very good start. The Bank of England has led the way internationally in many of its approaches towards climate change, and COP26 provides it with an opportunity to do more. In relation to the green homes grant scheme, I completely agree that it must be turned into a multi-year scheme to provide confidence to installers up and down the country.

I am grateful for the welcome that the hon. Gentleman has just given. I am delighted to hear that those on the Labour Front Bench are keen on a national nature service. It was first recommended in a report that we did as a Committee two or three years ago, so I am glad that all parts of the House are catching up with our Committee in its recommendations. On the scale of the measures that are required, our Committee did not seek to quantify them, but we absolutely recognise that this is a multi-year, multibillion-pound effort required in order to achieve the net zero ambition. It will reach across all elements of society and the economy; minor measures will not move the dial.

I am grateful to my right hon. Friend for his question. The Committee is taking an interest in the impact of a transition from the current economy, with its carbon-intensive sectors, to a net zero economy. We are looking at our future programme and some of the impacts of green jobs, which we are in the middle of an inquiry on now, and we will be addressing specifically the point that he makes about the impact on the motor sector. In the future, we are interested in some of the impacts of moving from an internal combustion engine source of transport to electrified transport and what that might do across different transport sectors. We will be working with the Transport Committee to ensure that we do not duplicate efforts, but that we are able to look into those matters.

[Source]