14:17 The Secretary of State for Levelling Up, Housing and Communities (Michael Gove)

The other key changes that I want to mention in the context of improving productivity were the changes on regulation, particularly of the Medicines and Healthcare products Regulatory Agency. Those are coming about as a result of Sir Patrick Vallance’s review of how we can better regulate the science and tech sector outside the European Union. Then there is the investment in energy. I know that we are not going as far as the right hon. Member for Doncaster North wants—indeed, he is not even being allowed to go as far as he would want by the shadow Chancellor, the right hon. Member for Leeds West (Rachel Reeves)—but with our investment in Great British Nuclear and carbon capture and storage, we are ensuring that we move towards net zero in an environmentally and economically sustainable way.

One key point of distinction between those on the Government Benches and those on the Opposition Benches is that this is the Government who legislated for net zero and who introduced the 25-year environment plan. We have been the greenest Government ever. We are also the Government who believe in moving to net zero in a sustainable way. If we are to do that, it is vital that we continue to have the means, through oil and gas from the North sea, to have a just transition. Jobs in the north-east of Scotland need to be protected, as do jobs in Middlesborough, Tyneside and Humberside. It is those on this side of the House who believe that we can have sustainable and prudent new exploration and new drilling. The message from those on the Opposition Benches, whether SNP, Liberal Democrat or Labour, to the north-east of Scotland and to workers in Aberdeen, Middlesbrough, Tyneside and Humberside is, “We put our ideology ahead of your jobs and growth.” Those of us on the Government Benches will not stand for it.

First, the hon. Gentleman is a fantastic advocate for his constituency and the steel sector. Secondly, as far as I know, the Labour proposals that have been put forward, which we welcome, are not funded. [ Interruption. ] No, I do not believe they are. Thirdly, it is the case that if we are to have a sustainable steel industry, we need to move towards its decarbonisation and a bigger role for hydrogen, but no scientist and no one in the steel industry thinks that will be an answer tomorrow.

Does the Secretary of State want to comment on the CBI report on climate change and the relative investment of different countries, including the UK? It puts us below Germany, France, the US, the EU and the World Bank for investment through public spending on climate change.

Yesterday, the Intergovernmental Panel on Climate Change issued its most damning report yet. This Government go around the world telling other Governments not to open coalmines, yet that is exactly what this Government are doing. They are also issuing new oil and gas licences, yet not investing in the most efficient and cheapest renewable energy of all, which is onshore wind. Will the Secretary of State at least admit that this Government are not doing anything to commit to ensuring that our next generation has a future linked to the economy, and a more sustainable future at that?

I am very grateful to the hon. Lady, who is a brilliant advocate for the environment. Some of the arguments she has made in this place have weighed with me, and she has helpfully corrected me in the past when I have been in the wrong, but on this occasion I have respectfully to disagree with her. I cannot see how we can have an effective and just transition to a net zero future—not a total zero future, but a net zero future—without oil and gas playing a diminishing but significant and strategic part.

If there are people in this House—and there are on the Front Benches of almost every other party—who believe that we should get rid of oil and gas like that tomorrow or overnight, let them say so. If there are people who think that there should be no further exploration or drilling of our own domestic oil and gas resources, let them go to Aberdeen, Middlesbrough or Grimsby and say so, but I do not think they will receive a warm welcome from the voters there or from the investors. On the point about the coalmine, again I am restricted in what I can say because I have merely followed the advice of the planning inspector. The planning inspector was very clear that both the net zero and downstream emissions as a result of this change would actually contribute to a stronger environmental posture for the UK, not a weaker one.

I want to turn to the area of renewable energy, which the hon. Member for Cardiff North (Anna McMorrin) mentioned. She, like me, is a fan and an advocate of renewables. Let me take her on a journey—a journey to Teesside. I would invite her to join me in visiting Teesport, in the constituency of my hon. Friend the Member for Redcar (Jacob Young). I would like her, and indeed everyone in the House, to join me in seeing what Ben Houchen and the Tees Valley Combined Authority have done there; to see the way in which turbines are assembled there; and to see the way in which the investment secured through the freeport there is providing high-quality, high-paying jobs in green technology, at the cutting-edge of the future, alongside hydrogen work.

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14:49 Ed Miliband (Labour)

Let us talk about the third part of the Budget, because it does not just have the wrong priorities for now, but for the future too. I want to come on to the energy transformation that the country needs. If we want to get energy bills down, there is a simple answer: going all in on a green energy sprint. We know that wind and solar are many times cheaper than fossil fuels, but the problem is that we have a Government who do not get it. The Levelling Up Secretary is a case in point. When he should be blocking coalmines he waves them through, as he has done in Cumbria. By the way, it will interest the House to know that he said it is carbon neutral, good for the climate and good for the environment. People may wonder. We have been going around the world lecturing people about getting off coal, so how have we suddenly got a coalmine that is good for the environment? Well, the answer is that in the calculations he made, he does not count the burning of the coal, just the mining of it. That is like saying tobacco does not damage your health if you do not take into account the smoking of it. He can correct me if I am wrong, but that is correct, isn’t it? Yes, it is correct.

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15:08 Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)

Contrary to what the shadow Secretary of State said in his closing remarks, Net Zero Teesside is a reality. It is going up as we speak, backed by Shell, Equinor and BP—real companies investing in a real project that is transformational not just for the industries of the future, but our existing industrial base in steel, chemicals, plastics and all those industries which emit carbon dioxide as an intrinsic part of their production, not just in terms of the emissions released as part of energy generation, but as a by-product. That is why carbon capture is so vital. That is why it was so welcome that it was backed strongly in the Budget last week. We had a welcome decision on new nuclear and its classification as a sustainable technology, which is absolutely right and vital for the future. I welcome warmly the position to keep Hartlepool nuclear power station producing for two more years.

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15:13 Alan Brown (Kilmarnock and Loudoun) (SNP)

One thing is for sure: this Budget is not about the Tories trying to help grow the Scottish economy. We have the highest energy bills in the UK, but we do have our fair share of the biggest cut in living standards since the 1950s and of Brexit’s 4% cut to GDP. Are we supposed to be grateful for being part of the broad shoulders of the UK when that is what being part of the sharing process looks like? There is £65 billion of additional income from oil and gas revenues, yet the UK Government will not even match the Scottish Government’s £500 million just transition fund, even though the Secretary of State was talking about the need for a just transition in the oil and gas sector.

When it comes to energy considerations, it seems that the intention is to sabotage the good work that has gone on in the renewable energy sector. While the United States has the Inflation Reduction Act, the Tories have given us the energy generator levy, but with no corresponding renewable investment allowance to encourage reinvestment. We had an announcement of £20 billion in funding for carbon capture and storage, but Acorn did not even get a mention in either the Budget book or the speech. That is shameful given the history of pulling funding from Peterhead.

Paragraph 4.99 of the Budget document mentions track 1 expansion later this year. Is that a realistic prospect for Acorn? If not, what is the timescale for announcing the track 2 processes? Not only is Acorn the most advanced cluster and the easiest to deliver, its progress is needed to address greenhouse gas emissions from Scotland’s two biggest polluters. It is the only way that Scotland can meet its 2030 commitments. The next time that Scottish Tories complain about Scotland possibly missing emission targets, they had better look in before they look out, and question the decisions made down here.

On storage, we have well-established pumped storage hydro technology, which is suited to complementing renewable energy. It uses spare energy to pump fill reservoirs and can generate electricity when there is peak demand. Coire Glas has been consented since 2020. SSE has £1.5 billion of capital available to invest in it. Just today, it has announced a £100-million commitment for site investigation and advance design works. It would be the first pumped hydro storage scheme to be constructed in the UK in 40 years, and would double the capacity of pumped storage in the UK while creating 500 construction jobs in the highlands. It will be able to power 3 million homes continuously for 24 hours. No subsidy is required; it is not looking for a regulated asset base model or even for taxpayers to share the risk. All that industry is asking for is a cap and floor mechanism to stabilise the price received for electricity generation.

If we are looking at a truly green system, the Budget document is notable for not using the phrase “green hydrogen” once. Are the UK Government now content to fall behind other countries? What is the real scale of their ambition? The day after the Budget, we had the updated allocations for the next renewable energy auction for assessment report 5. So despite rampant inflation and despite some projects struggling against the strike rates agreed for allocation round 4, the Government have decided to cut the overall budget by 30%. It is madness, and that needs to be revisited urgently.

And then we have the insult of passing that as a green technology. If we look at the costs of the existing nuclear waste legacy we see that the Nuclear Decommissioning Authority estimates it is going to cost us £235 billion to clean up. There is no solution yet for dealing with radioactive waste other than burying it for thousands of years, so why do we want to pass that as a green renewable energy system?

In reality, nuclear means billions of pounds of increased debt added to our energy bills and future generations paying for decommissioning and handling of waste, no matter the pretence that that is somehow included in upfront estimates. It means years of further delays, when that money could and should be invested in renewable energy, storage, green hydrogen and, of course, in energy efficiency upgrades.

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16:29 Mr John Baron (Basildon and Billericay) (Con)

My second point, in the minute left, is about investment and productivity. There is a severe risk that we will be squeezed between the US’s Inflation Reduction Act, worth £300 billion, and the EU’s green deal industrial plan, worth £200 billion. Subsidies and investment incentives do work: we need only look at our renewable energy sector. I suggest to Ministers that we need to follow this closely. I welcome the investment proposals in the Budget, and they will go a long way, but we need to monitor this continually, otherwise we risk losing our lead in so many areas in the green technology space. There is simply no room for complacency.

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16:47 Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)

This Budget barely gives Scots crumbs from the table. In Scotland we have 2.4 million homes. In a parliamentary written answer, the Minister for Energy Security and Net Zero, the right hon. Member for Beverley and Holderness (Graham Stuart), confirmed to my hon. Friend the Member for East Lothian (Kenny MacAskill) that Scotland generated and sent south 35 TWh of electricity—equivalent to 35 billion kW—in 2021. In only eight years’ time, that will have increased to 124 TWh—enough electricity to power tens of millions of homes—yet no revenue and no jobs are coming to Scotland.

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17:30 Anna McMorrin (Labour)

Just yesterday, the Intergovernmental Panel on Climate Change released its most damning report yet, a final warning on the climate crisis. The IPCC warned that only swift and drastic action can avert what is predicted, and I think we can all agree that this Budget is neither swift nor drastic. Without making that link between the climate and the economy, we will never be able to face the challenges ahead. Our children will remember the failing political choices of this Government.

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17:38 Jeremy Corbyn (Other)

That brings me to my second point, which is that the energy companies are making enormous profits and have done so for a very long time. There is no argument other than to take them into public ownership, so that we can control energy prices. It also means recognising the need to do far more to bring about a green sustainable economy. The United Nations report was damning yesterday—damning on increasing global warming and damning on its implications. It made the case that there has to be real investment in alternative green energy sources. That does not mean just relabelling things as green; it means actually doing it. While we have a privately run energy system, that is not likely to happen.

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18:00 Stephen Kinnock (Labour)

The Labour party knows that every leading economy has a strong and healthy steel industry, so it is deeply concerning that of the leading economies, only Britain has a declining steel industry. It is deeply troubling that there is nothing for steel in this Budget. We know that more steel will be required in the net zero economies of the future than there is today. That creates a huge market opportunity for British steelmakers across the globe. We know that UK steel companies employ 35,000 in good, well-paid jobs well above regional pay averages, and 45,000 more in our supply chains. We know that steel underpins our defence sector and our nation’s economic resilience, in an age of turbulence where authoritarian regimes are a threat to our supply chains and our democratic values. We know that if the Government continue to sit on their hands, tens of thousands of jobs could be lost and our country’s resilience will be in tatters.

We on the Labour Benches recognise the scale of the challenge. Steel companies in Canada, Germany and Spain are receiving up to £1 billion per plant to decarbonise, yet the British Government’s offer to our steelmakers is a fraction of that. It is therefore unsurprising that Tata Steel, owners of the biggest steelworks in the UK in my constituency, has reportedly given the Government until July to approve its investment offer, due to growing concerns that competitors in mainland Europe are getting ahead of us in the drive towards green steel. If the Government continue to dither and delay, we could see the closing down of one of the blast furnaces, which would be truly a hammer blow for our Port Talbot steelworks.

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18:08 Beth Winter (Cynon Valley) (Lab)

The UK Government also continue the lie of designating not only HS2 but now Northern Powerhouse Rail as “England and Wales” projects, which should result in a total of £6 billion for the Welsh economy. The Welsh Government are striving to chart a different path. The programme for government in Wales is a commitment to a progressive agenda: from free school meals to the universal basic income pilot, from a publicly owned energy company to tackling the climate crisis in order to secure prosperous and fulfilling lives for current and future generations.

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18:25 Gavin Newlands (Paisley and Renfrewshire North) (SNP)

Last week should have seen a Budget that embraces the idea that moving to net zero and decarbonising our economy and society is an opportunity to rebalance our economy and recognise that the old platitudes and ideologies no longer work. Instead, we saw the same mistakes, the same retrenchment and the same failures that have dragged the UK ever closer to the bottom of the pile, and the same determination to continue down a path that is disastrous not only for our society but for our planet.

Meanwhile, the UK Government pledged to drop billions into the black hole of nuclear power, surely the least sustainable energy there is. Despite the potential of fuels such as green hydrogen and tidal to reduce our dependence on fossil fuels, alongside the known quantities of hydro and wind, we will see another wave of massively subsidised nuclear power stations, all presumably to be cleaned up by our children and grandchildren. In trying to justify not giving free school meals to those in need, or slashing transport funding outside London, the Tories claim they do not want future generations to pay the price for our financial profligacy, but they are more than happy to bequeath to those same future generations the cost and danger of dealing with our toxic waste.

If we are serious about sustainable economic growth, we need public transport and transport infrastructure fit for the 21st century, not the 19th century. There has been a sea change in rail in Scotland since devolution, driven by Governments of all political colours, except the Tories, of course. We have seen electrification and decarbonisation right across the country, and Scotland’s rail network will be fully decarbonised by 2035, which is some achievement for a rail network that was ignored by this place for decades. In contrast, the last decade of rail investment south of the border has been a sorry tale of delay, incompetence and hard political ideology, which has meant virtually zero progress on modernising the network anywhere outside the M25.

Public charge points are being rolled out by the UK Government at a glacial pace, in a scheme ironically called Project Rapid, which has seen the Government fall 200,000 short of their 300,000 target by 2030. That target is utterly imperative. Scotland has ordered 11 times more zero-emission buses per head than England. I could go on.

Did we see any new funding or action in the Budget to show any sign that the Chancellor and his colleagues understand the gravity of the situation? Not a sniff. This Budget was another missed opportunity, following the last 13 years of torpor and decline. It shows zero understanding of the fundamental and, to be blunt, existential challenges our society faces. The transition to net zero is a golden opportunity to revitalise communities and our economy. The UK and its failed economic strategy should get out of the way of Scotland’s aspirations to be a net zero nation and a world leader in decarbonisation. It is clearer than ever that those aspirations will be met only through independence.

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18:46 John Glen (Conservative)

On growth—the focus of the Budget—there were those who said that we would fall into recession in 2023, but last week the OBR said that we will not enter a recession this year. Instead, after this year, the UK economy will grow in every single year of the forecast period, including by 2.5% in 2025. As we look to the future, we are now rolling out the biggest employment package ever, we are overhauling incentives to get businesses growing, and we are unleashing our green energy sector while supporting families and businesses with bills in the short term. But, contrary to the characterisation in many Opposition speeches today, there is no complacency from this Government. There will be no let-up in our relentless focus on enabling growth.

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