12:41 The Minister for Climate Change and Industry (Claire Perry)

We have already shown that action on climate change and economic growth go hand in hand. Since 1990, we in the United Kingdom have grown our economy by almost 70%, and in that time we have reduced our emissions by over 40%, which is the best performance in the G7. The latest research shows that the UK was the fastest of any country in the G20 to decarbonise in 2016. This achievement shows that a low-carbon transition can go hand in hand with economic growth, and it is our belief that the UK can lead the world in creating clean technologies, jobs and businesses. This is the core message of the clean growth strategy. It will sit at the heart of our industrial strategy and will build on the successes I have already mentioned to benefit businesses, consumers, the air we breathe, our health and the climate.

I also pay tribute to the former Prime Minister and former right hon. Member for Witney, who sustained his support for action on climate change despite the difficult economic circumstances we inherited. Maintaining a political consensus on the need for ambitious action both across Westminster and our devolved Administrations has been a critical part of the UK’s success to date.

Time and again, we have shown how the United Kingdom is a world leader in tackling climate change. We were the first country in the world to set a statutory Climate Change Act, which binds us to our five-year carbon budgets and has committed us to cutting our greenhouse gas emissions by at least 80% by 2050. I set out today in the strategy how we are on track to over-deliver on our carbon budgets 1, 2 and 3 and well on track to meet our requirements for carbon budgets 4 and 5.

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12:48 Dr Alan Whitehead (Southampton, Test) (Lab)

I welcome the final publication—after, we have to agree, many delays—of “The Clean Growth Strategy”, and I agree with the Minister that the UK has been, as it should be, towards the front of the pack in action to decarbonise our economy. I also agree that the responsibility for getting us to that position lies with the Members to whom she has paid tribute today. I also welcome the Minister’s clear position that she is fundamentally onside on the need to radically decarbonise our country to meet climate change imperatives—unlike, I have to say, many of her Back-Bench colleagues. I warmly welcome her efforts in this direction and clear commitment to the tasks we have to undertake.

I also welcome many of the additional policy directions that are contained in the document. I particularly welcome the commitment to further rounds of offshore wind to assist with the decarbonisation of the energy sector, and what I hope will be an intention to return to the development of onshore wind. These new policies and commitments, among many others, are important because it is clear that on present policies the UK is set to miss its key targets for decarbonisation, set out in the fourth and fifth carbon budgets, which this House has endorsed. That is surely the point of judgment for the efficacy of this plan: does it do what it is required by the terms of the Climate Change Act 2008:

On getting there, does the Minister recognise just how far behind in decarbonisation we are in the heat sector? Does she consider that the funding set out for the renewable heat incentive up to 2021, which appears to be a restatement of what is already there, and of the energy company obligation, which appears to be a time extension of present funding for energy efficiency, will get us anywhere near the indicative heat decarbonisation and energy efficiency carbon reductions set out by the Committee on Climate Change in the fifth carbon budget?

The Minister will recall what emphasis the Committee on Climate Change placed on the role of carbon capture and storage. She mentioned in her statement that the Government now appear to be waking up once again to the idea that carbon capture and storage is a good thing. While I welcome that apparent renewed interest in actually doing something about the establishment of CCS, both for energy generation and energy-intensive industries, does she consider that taking away £1 billion of funding for the development of CCS, as the Government did in 2016, and replacing it with up to £100 million of development funding in this plan will get us anywhere near the level of CCS use that the Committee on Climate Change recommends?

I agree with the Minister that a low-carbon transition can go hand-in-hand with economic growth, and she has today and on other occasions emphasised that the use of industrial strategy to drive decarbonisation, while providing for jobs, supply chains and manufacturing in the process, is a very important fundamental platform for our decarbonisation approach generally.

I want to reassure the hon. Gentleman, however, and I have helpfully set out on page 41 the fact that, should we have to, and with the consent of the Committee on Climate Change, we can use flexibilities. My intention is that we do not have to use them. Because we have over-delivered, and will over-deliver so substantially on current projections, up to carbon budget 3, more than enough will have been built up in terms of flexibilities to cover carbon budget 4 with more left over. My sense is that, given the ambition, the pace of change and the extraordinary changes in the cost and adaptation of new technology, we will comfortably exceed these budgets. But he is right that we have a statutory duty to report on this. This is a very good example of legislation making politicians focus on what is important, over the political cycle. I thank him for his ability to question, which enables me to confirm those points.

I admire the hon. Gentleman’s shadow ambition for renewable energy, but I want to be clear today that when we look at new technologies, it is important that we apply the triple test. First, the technology must decarbonise sufficiently; secondly, it must be affordable—we have to see a very good cost trajectory; and thirdly, it must build capabilities that Britain can build on, so that we can export and grow our own economy.

It is interesting to hear that Maggie Thatcher’s policy of shutting down coal mines and importing coal was down to some strategic vision about climate change. On a serious note, however, I thank the Minister for early sight of the statement and welcome the document’s publication, although she will understand that I have not yet had a chance to read it from cover to cover.

The clean growth plan clearly needs to be strategic and must bind other Departments. As the shadow Minister said, it must tie in and deliver the desired outcomes of the carbon budget and our climate change commitments. That is the spirit and intention of the strategy, but the Government need to ensure that that actually happens, so Treasury commitments are necessary. Some £2.5 billion of investment was outlined in the statement, but that is in reality only a fraction of the investment that is needed to decarbonise the UK.

All future energy scenarios rely on carbon capture and storage, but the strategy both includes and dismisses the use of CCS, so I am not exactly sure about the Government’s policy. We need a real commitment to delivering CCS, and the shadow Minister correctly said that pulling the £1 billion funding was farcical. Although the document states that £130 million has been spent on CCS R and D to date, that money has effectively been wasted. That was highlighted by a National Audit Office report, which said that the previous investment did not deliver any real outcomes. Investors need to have confidence in CCS, so the Government need to take a lead. The same can be said of tidal lagoons. If lagoons are to deliver, we need a much better show of commitment from the UK Government and we need it soon.

I welcome this important strategy, but will my hon. Friend ensure that the resulting vital investment is directed at the most efficient and reliable sources of renewable energy, such as tidal power?

My hon. Friend will know that we try to be technologically neutral in the auction structure to ensure that sources of energy are the lowest cost and the most effective in terms of decarbonisation, creating a strategic base upon which we can innovate and invest. The excellent policy work has been striking, and I pay tribute to some of my predecessors in the Department. For example, our work on offshore wind, which involved setting a framework, investing up front and then driving down costs, has been amazing. Those are the sorts of processes that we would like all renewables to go through. My hon. Friend mentioned water power, and we have the second-highest tidal range in the world after the bay of Fundy—I know that only because I was a geography student—and exceptional amounts of power are being generated from our coastline.

To reassure the right hon. Gentleman, not only has the Green Investment Bank—it is now known as the Green Investment Group—signed up to the plan, it has joined our green finance taskforce. We have asked our leading minds and operators in financial services, insurance, risk assessment and financial regulation to come together, so that we can not only mobilise the level of private capital that we need to drive this transformation in the UK, but export that incredible professional expertise right across the world. The taskforce is already coming up with solutions, and we will again be able to lead the world by mobilising capital and investing the right amount that we need to decarbonise.

I congratulate my hon. Friend on producing this brilliant strategy. It is brimming with ambition and full of good ideas, as we would expect from her. It is great stuff, but I just want to ask about one issue. The strategy tells us that transport emissions have been cut by 2% since 1990 compared with an average of well above 20% in all others sectors, so if we are to hit the 2050 targets, we will need something really radical in transport. The strategy talks about banning the sale of petrol and diesel cars by 2040, and I want my hon. Friend to reassure me that that will be equal to the challenge we face.

I was not there myself, but the Minister told the Tory party conference that she viewed carbon capture and storage as a vital technology for the future, and I welcome its revival on the Government’s policy platform. They are certainly seeing sense. CCS is also vital for Teesside and for the jobs that the Minister talked about. Will she back the Teesside Collective project with real resources and, as she develops new initiatives, engage with the all-party parliamentary group on carbon capture and storage, which I chair?

As we set out clearly in the document, we think that gas, particularly its lowest carbon form, absolutely has an important role to play in our energy mix. That is why a renewed focus on and investment in CCUS is important.

At the moment, the Government are failing to give a clear steer on emissions targets, have given no answers on the Swansea Bay tidal lagoon and are not investing in any meaningful way in renewable energy or energy efficiency. Will the Minister seek to introduce legally binding targets for renewable energy, as the Welsh Labour Government announced they would earlier this month? Successful markets need a clear strategic vision and leadership, and an effective regulatory regime. This Conservative Government have neither.

We have an effective, legally binding regime that operates right across the UK. It is called the Climate Change Act, introduced with cross-party support in 2008. We have to produce our carbon targets. I have set out today why I think we are on a good trajectory towards them. However, I fear that the hon. Lady wants to be one of those “command and control” Marxists who wants to predict every single thing that happens in the economy at all times. That is not how innovation works. We set out a framework for investment. We try not to pick technologies; we want the lowest carbon, the lowest cost and the most innovation. We then work with the private sector to create the most innovative ecosystems, so that we can capture the opportunities. I will be very happy to have a cup of coffee with the hon. Lady and give her a slight cheering up. There is a lot of good stuff in the report, and she should be supporting it.

I echo what colleagues from across the House have said about this being an excellent announcement, and I congratulate the Minister on everything she has done to bring it about today. I echo what the hon. Member for Stockton North (Alex Cunningham) said about how this will be particularly warmly welcomed on Teesside. May I invite the Minister to agree with me that Teesside is the natural starting point for CCS in the UK, owing to its concentrated and diverse industry, proximity to north-east storage sites and optionality for future low-carbon technologies, such as hydrogen?

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