Chris McDonald is the Labour MP for Stockton North.
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We have of course talked a lot about ceramics, but my hon. Friend the Member for Broxtowe (Juliet Campbell) made a much wider point about manufacturing in her area of the east midlands. The issues facing ceramics are also faced by manufacturing industries around the country: high energy costs, the import of cheap goods and challenges with decarbonisation. The challenges have been exacerbated by the geopolitical instability due to the invasion of Ukraine and the conflict in the middle east, which has put pressure on our energy prices.
So many Members mentioned the ceramic industry support scheme. My hon. Friend the Member for Amber Valley thanked many people involved in the creation of that scheme—our right hon. Friend the Chancellor of the Exchequer played such an important role—but she was not able to thank herself, so I thank her on behalf of us all. I wonder whether the scheme would have been brought forward so speedily were it not for her work. It is important to recognise the scheme as a great vote of confidence by the Government in the ceramics industry. We are determined to work with the industry to provide support with decarbonisation, and I thank all my parliamentary colleagues who have advocated for it.
A number of Members raised issues relating to the design of the support scheme. My hon. Friends the Members for Stoke-on-Trent North (David Williams) and for Stoke-on-Trent South (Dr Gardner) raised issues around eligibility, consultees and so on. I reassure them that we are determined that the scheme will have the maximum eligibility to enable firms to win support for both capital and operating expenses around their decarbonisation, and to make that decarbonisation makes sense as well.
Full debate: Ceramics Industry
My hon. Friend put it exactly right. We need to take both capital and operating costs into account. Fundamentally, the issue comes down to a belief or view—or, in my case, looking at the economic evidence and corporate finance. Is it possible to decarbonise and reindustrialise? Yes, of course it is, and that is precisely what the Government want to do. No one in the industry is asking us to tear up climate policy—they are using the policy to invest, and have invested £100 billion since the general election on that basis.
Full debate: Ceramics Industry
I will continue, but I will address a point that the right hon. Gentleman raised. He focused on the parts of the sector that are unable to electrify, which I am also very concerned about. Larger brick kilns and some sanitaryware items, which my hon. Friend the Member for Lichfield spoke about in relation to his constituency, are difficult to electrify. The main decarbonisation options on the table are hydrogen, or biogas —that was not mentioned today but it could be a solution—but it is important that businesses remain competitive and able to raise capital until such a time as those occur.
Full debate: Ceramics Industry
I thank my hon. Friend for raising Leyland Trucks. He will be aware of some of the procurement advice changes this Government have made, because we are keen to support British industry particularly in areas relating to national security. Thanks to Government support, Leyland Trucks has invested in its assembly lines and is now capable of producing 30 electric trucks per shift for sale both here in the UK and on international markets. It is also building a fully integrated zero-emission battery electric road sweeper. That is funded in part by our DRIVE35 programme, which represents the biggest investment in our car industry since the second world war. Leyland Trucks is vital to our automative sector and the Government’s industrial strategy.
Full debate: Private Sector Investment: Lancashire
I agree that procurement has an important role to play here. I am sure that my hon. Friend will have welcomed recent changes in guidance by the Cabinet Office to ensure that British steel producers are well placed to win these orders, as well as in the areas of renewable energy, where the Government are awarding significant contracts, and nuclear power, where we are again endeavouring to ensure that British companies are well placed to win those contracts.
Full debate: Steel Industry (Nationalisation) Bill
The hon. Lady raises an important point about managing the transition, and that is certainly what this Government are doing. I just want to challenge the point about the number of jobs being created by the number being lost. I know that the Opposition are always keen to quote the research from Robert Gordon University, but it does point to more jobs being created than lost. Actually, the recent report from the Confederation of British Industry now says that 1.1 million jobs in our economy are now dependent on net zero. But clearly, we do need to support the transition—it will not happen on its own. That is why, through our North sea transition funding and the opportunities through our clean energy technical colleges, we are providing that opportunity for people.
Full debate: Clean Energy Transition: Supporting People in Work
Clearly, on a personal level, I say to the hon. Member’s constituent that I fully understand the position she is in, having lived through such transitions myself. But the difference with this Government is that we are taking care to ensure that communities are supported—1.1 million jobs now in net zero, £105 billion of gross value added and £90 billion invested in clean energy industries since this Government came to power. We are building the British industry of the future and attracting investment to do that. We are creating the jobs of the future, while the Conservatives sat and oversaw a decline.
Full debate: Clean Energy Transition: Supporting People in Work
I thank my hon. Friend and all the other MPs from the Stoke and Staffordshire area for their work in championing the ceramics industry. First, let me say how sad I was to hear the news about Denby, as that company proceeds into administration. The Government are providing support to the workforce. On the point he raised, with the Chancellor of the Exchequer’s support we are providing £120 million to enable ceramics companies to invest in lower carbon production—essentially, electrical furnaces—so that they can decarbonise and reduce their operating costs. I will be working closely with ceramics MPs on the implementation.
Full debate: Cost of Energy: Support for Businesses
Safeguarding the long-term future of Britain’s steel capability and capacity is in our national interest. The Government believe it is in the public interest to bring legislation that will give the Government the powers to nationalise British Steel. Bringing British Steel into national ownership would allow the Government to explore what future opportunities there may be for British Steel including to modernise the site, deliver a transition to decarbonised steelmaking at Scunthorpe, and provide stability for workers, suppliers and customers.
Full debate: British Steel
The Government’s ambition of clean power by 2030 is critical for moving all of us off our costly reliance on fossil fuels and for protecting consumer bills. The shadow Minister, the hon. Member for Mid Buckinghamshire (Greg Smith), rightly said that we need more investment in small, modular reactors. That is true, but we also need to invest in our cheapest form of energy, which is solar; our second cheapest, which is onshore wind; our third cheapest, which is offshore wind; and full scale nuclear and small modular reactors. We need to do all those things for our energy security, to bring bills down and, of course, to tackle climate change.
Recent events in the middle east have reinforced the importance of producing home-grown clean energy. Delivering our clean power mission will help to boost Britain’s energy independence, protect bill payers, support high-skilled jobs and tackle the climate crisis. Onshore wind is a critical component to delivering those goals. Getting more low-cost renewables such as onshore wind on to the system reduces our exposure to volatile global fossil fuel markets, protecting British families from the effects of future price shocks. This Government will continue to support onshore wind. We have removed the damaging de facto ban in England that has been in place for almost a decade and reintroduced the technology into the nationally significant infrastructure projects regime.
Full debate: Wind Farms: Protected Peatland
I hope the hon. Member will recognise that as I continue my remarks I will address many of the points that he made in his speech, including the point about peatland. From the contributions we have heard today, I would say there is strong agreement in this room on the need both to tackle climate change and to care for our special environments in the UK, including peatland. He will hear more on that from me shortly.
We heard earlier about EN-3, the national policy statement for renewable energy, which makes clear that, although onshore wind is permitted on peatland, applicants should seek and rule out other locations first. EN-3 guides developers to avoid peatland where possible, particularly areas of deep peat. Where that is not possible, developers are required to mitigate or compensate for peatland impacts. We are now going further to give decision makers and developers more tools to assess and manage the impacts of onshore wind on peatland. We committed in EN-3 to publish additional guidance regarding wind farm construction on peatland in England, something the hon. Member for Glastonbury and Somerton (Sarah Dyke) asked about in particular.
Full debate: Wind Farms: Protected Peatland
We continue to work with Jingye to find a pragmatic, realistic solution for the future of the site. Once a solution is found, we will terminate the directions issued to British Steel under the Act and make a statement on the need to retain, or repeal, the legislation. As we have stated previously, our long-term aspiration for the UK steel sector will require co-investment with the private sector to enable modernisation and decarbonisation and to safeguard taxpayers’ money.
Full debate: British Steel
My hon. Friend is right that the allocation round was incredibly successful. Of course, the Conservatives wanted to cancel it, given their opposition to clean industry jobs across the UK. In the north-east, where my hon. Friend is from, we are forecasting an increase of 20,000 jobs. I know that the Smulders yard in her constituency will seek to benefit from that because, as the Chancellor of the Exchequer said, it matters to this Government where things are made. We want those supply chain jobs here in the UK—jobs the Reform party would take away from constituents like hers and mine, with its anti-net zero ideology.
Full debate: Clean Energy: Private Sector Investment
I turn to some of the specific items. Given the scale of the support for the steel industry, I shall start there. It was raised by the Chair of the Select Committee and many other Members. Our steel industry is of course strategically important as part of British heavy industry, supporting the UK’s industrial base, our construction sector and our national and economic security, as we heard in the earlier estimates debate on the Ministry of Defence. Transforming the steel sector is essential for securing a competitive, modern and sustainable industrial base, ensuring the UK can meet its long-term net zero commitments while maintaining critical domestic capability.
Full debate: Department for Business and Trade
We continue to work with Jingye to find a pragmatic, realistic solution for the future of the site. Once a solution is found, we will terminate the directions issued to British Steel under the Act and make a statement on the need to retain, or repeal, the legislation. As we have stated previously, our long-term aspiration for the UK steel sector will require co-investment with the private sector. Across the steel sector, private sector involvement enables modernisation and decarbonisation and safeguards taxpayers money.
Full debate: British Steel
The right hon. Member and I debated this at length in the Delegated Legislation Committee last week. On the impact of this measure on Northern Ireland, I am sure he will be pleased to welcome the fact that we are providing a 50% reduction on the carbon tax associated with the extension to domestic maritime for journeys to Northern Ireland, to ensure that they are not disadvantaged when compared with journeys to the Republic of Ireland.
Full debate: Topical Questions
The Government do not comment on or interfere with the carbon price. Ultimately, the price is set by the market to ensure that the ETS drives decarbonisation where it is cheapest. In this way, it can act most effectively as a financial incentive to decarbonise, without specifying the particular technology.
Full debate: UK Emissions Trading Scheme
I am not sure if the shadow Secretary of State is conflating the various carbon taxes with the emissions trading scheme, but to be clear: the Government do not set or comment on the value of the carbon in the emissions trading scheme. That is a matter for the market. It is of course a policy on which the previous Government were very keen, because it drives the most efficient forms of decarbonisation. Ultimately, it places a price on carbon emissions that ensures private capital floods into the right places to decarbonise, as we have seen so successfully with the power sector in the UK.
Full debate: UK Emissions Trading Scheme
The hon. Gentleman is quite right to point out the impact of energy costs on small businesses. As we have seen, that has been largely driven over many years by the linkage between energy costs and gas prices, which is something that this Government are determined to deal with as we pile on renewable energy as part of our clean power mission. UK gas costs are competitive with Europe after policy costs are included, but of course we want to remove businesses from having to rely on the whims of the fossil fuel market and enable them to rely on low-cost, secure, home-grown energy.
Full debate: Businesses: Cost of Energy
Of course, it is central to the Government’s policy that businesses are incentivised to invest in renewable energy and electrification where that is possible, so that they can access the lower-cost electrical energy that is coming on stream as part of our 2030 clean power mission. The hon. Lady mentioned that the business was a manufacturing business, so it is possible that it could qualify for our British industrial competitiveness scheme, which we will bring forward in 2027. The results of the consultation on that scheme will be published shortly.
Full debate: Businesses: Cost of Energy
I am very concerned about gas-intensive industries, and the Government’s policy is intended to ensure that they are given the support to decarbonise by electrifying, where that is possible, whether that is through confidence in long-term energy prices owing to the delivery of our clean power mission or through support to invest in their business.
Full debate: Businesses: Cost of Energy
I am extremely grateful to my hon. Friend for engaging with me on this topic in advance of the recent changes to the emissions trading scheme to include maritime emissions. It is incredibly important that domestic maritime emissions are included, so as to incentivise the investment required to decarbonise. I am aware of the issue in the Isle of Wight. On one route, two vessels will be affected. I know that he has invited me to visit the Isle of Wight and meet the businesses concerned, and I am allowed to make the commitment from the Dispatch Box that I will do that.
Full debate: Businesses: Cost of Energy
Many Members across the House—not only those on the Government side, but Liberal Democrats—are content to bask in the warm glow of solar power, onshore wind and offshore wind. I appreciate that the Opposition are feeling a chill breeze up their right flank and are tacking across to the climate-denying policies of Reform, but that cannot be the basis on which the country’s energy policy is determined. We must focus instead on low-cost energy for consumers and industry, on energy security and on good jobs, and that is what renewable energy delivers. Through this mechanism, we will ensure that our energy-intensive industries continue to be competitive in Europe.
Full debate: Draft Energy-Intensive Industry Electricity Support Payments and Levy (Amendment) Regulations 2026
That the Committee has considered the draft Greenhouse Gas Emissions Trading Scheme (Amendment) (Extension to Maritime Activities) Order 2026.
I am grateful to you, Sir Jeremy, and to the Committee for its consideration of the draft order, which was laid before Parliament on 13 January 2026. The UK ETS was established under the Climate Change Act 2008 by the Greenhouse Gas Emissions Trading Scheme Order 2020 as a UK-wide greenhouse gas emissions trading scheme contributing to the UK’s emissions reduction targets and net zero goal. The scheme was established to increase the climate ambition of the UK’s carbon pricing policy, while protecting the competitiveness of UK businesses.
The scheme is run by the UK ETS Authority, a joint body involving the UK Government and the devolved Governments. Under the scheme, a cap is set on the amount of certain greenhouse gases that may be emitted by the sectors it covers, and the cap is reduced over time so that total emissions must fall. Under the UK ETS, operators participating in the scheme are required to monitor, report on and surrender allowances in respect of their greenhouse gas emissions.
The scope of the UK ETS is being expanded to maritime activities as part of the Government’s strategy of decarbonising all sectors of the UK economy to meet our net zero target by 2050. The draft order is an effective lever to reduce emissions and delivers on a key commitment in the UK’s maritime decarbonisation strategy. We expect it to help to overcome key barriers to maritime decarbonisation by incentivising low-carbon fuels, fuel-efficient technologies and fuel-efficient operating practices.
The expansion of the UK ETS to cover maritime activities will support its role as a fundamental pillar of the UK’s climate policy. It plays a key part in the Government’s strategy of decarbonising all sectors of the UK economy to meet our net zero target by 2050. It also delivers on a key commitment within our maritime decarbonisation strategy, and I commend the draft order to the Committee.
Full debate: Draft Greenhouse Gas Emissions Trading Scheme (Amendment) (Extension to Maritime Activities) Order 2026
The hon. Gentleman and a number of Members mentioned the opportunity for decarbonisation. In my opening remarks, I mentioned a number of ways that that could be done, including more fuel-efficient operating practices and various other things. We have set aside £448 million of Government funding to support that, which was announced previously. If the hon. Gentleman would like to meet with me to go through more of that in detail and represent the views of his constituents, I would be happy to do that.
Full debate: Draft Greenhouse Gas Emissions Trading Scheme (Amendment) (Extension to Maritime Activities) Order 2026
The hon. and learned Member, the right hon. Member for East Antrim and the shadow Minister all made a general point about the cost associated with the changes. There is a cost to not tackling climate change. If operators of vessels were spilling oil into the Solent or the Irish sea, then I am quite sure that the hon. and right hon. Members’ constituents would be clamouring for the Government to introduce regulations to do something about it. The fact that this pollution is not observable to the naked eye does not make it any less important to tackle it. These environmental regulations—and the Government’s policy on net zero—are about tackling that pollution and providing a stable and predictable regime so that industry can invest.
Full debate: Draft Greenhouse Gas Emissions Trading Scheme (Amendment) (Extension to Maritime Activities) Order 2026
These changes have the support of all four Governments of the United Kingdom, and consensus in advancing carbon pricing policy to include domestic maritime is key to delivering our decarbonisation goals and driving green investment across the United Kingdom. I commend the draft order to the Committee.
Full debate: Draft Greenhouse Gas Emissions Trading Scheme (Amendment) (Extension to Maritime Activities) Order 2026
That the Committee has considered the draft Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2026.
The UK emissions trading scheme, the UK ETS, was established under the Climate Change Act 2008 by the Greenhouse Gas Emissions Trading Scheme Order 2020 as a UK-wide greenhouse gas emissions trading scheme contributing to the UK’s emissions reduction targets and net zero goal. The scheme is run by the UK ETS authority, a joint body comprising the UK Government and the devolved Governments. Our aim is to be predictable and responsible guardians of the scheme and its markets.
Under the UK ETS, operators are required to monitor, report on and surrender allowances in respect of their greenhouse gas emissions. While most allowances are purchased at regularly held auctions, operators in certain sectors at risk of carbon leakage are given a number of allowances for free, referred to as free allocations. Free allocations reduce exposure to the carbon price for those sectors at risk of carbon leakage and reduce the risk that decarbonisation efforts could be undermined by production, and the associated emissions, moving to other countries.
Benchmarks are the efficiency standards used to calculate each installation’s free allocation entitlement. Installations closer to their benchmark have a higher proportion of emissions covered by free allocation, rewarding more efficient installations and incentivising decarbonisation. The third change that the instrument makes is to use current benchmarks for the purpose of calculating free allocation for stationary installations for the 2027 scheme year. The instrument also provides for the ability to update the benchmark values used to calculate free allocation for the years 2028, 2029 and 2030 of the 2027-to-2030 allocation period. Maintaining current benchmarks for the 2027 year will allow time for industrial participants to adjust to the changes.
The changes in the draft order will deliver on commitments made by the UK ETS authority, improve the fairness of the scheme and increase certainty for both regulators and operators. They will ensure that free allocation continues to provide meaningful support to UK industry while maintaining the incentive to decarbonise and rewarding efficient installations. The amendments to the UK ETS will support its role as a key pillar of the UK’s climate policy. They demonstrate that we will take action to improve the scheme where necessary. I commend the draft order to the Committee.
Full debate: Draft Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2026
I will start by addressing some of the specific points in the draft order and then talk a bit more generally about some of the points that Members have raised. I appreciate the concerns on both sides of the House about the impact on industry and the risk, when we are decarbonising industry, of deindustrialisation. I know that this concern is sincerely felt by everybody in this room, even if we might differ at times on what we think the best approach is. That is why we have been so careful to consult industry on these measures, as I outlined in the long catalogue of dates in my opening speech. We have consulted carefully with industry and made sure we have listened to what they have said.
Some of the issues here run quite broadly around industrial competitiveness. Possibly one of the main points to recognise is that it is important through the whole decarbonisation process that industry manages to maintain access to its key markets, and clearly one of the key markets is the EU. That is where we come to the discussion about linking the EU ETS and the UK carbon border adjustment mechanism with the EU to enable our UK industries to continue to trade there. Negotiations with the EU started in November, but I want to be clear that they will only conclude in this way if it is in the UK interest to do that. We will continue to consult with UK industry on that matter too.
On the question of power and the impact of the instrument on energy bills, the important point is that the ETS applies to power that is produced from fossil fuels, not renewable energy. This Government’s policy is to pursue our clean power mission by 2030, which involves investing in the cheapest forms of power available, in onshore and offshore wind, solar power and nuclear energy. The purpose of the ETS is to incentivise that. The carbon price incentivises investment; it provides the incentive in power and in industry to invest in new green technologies.
Full debate: Draft Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2026
I think what the shadow Secretary of State has outlined is exactly the success of this policy—it has driven coal out of the system in favour of cheaper power. That is exactly the point of the ETS and the industrial investment. Of course, as we said, we are pursuing our clean power mission for energy security and to lower energy bills, as well as to ensure that we also have green energy.
Full debate: Draft Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2026
The shadow Secretary of State and I are clearly both concerned about the same thing. I know that that concern is shared across the House, but deindustrialisation and decarbonisation need not be in competition. Sadly, under the previous Government, there was a 30% reduction in UK cement production, a nearly 50% reduction in automotive production and a 30% reduction in chemicals production. That is why, alongside the ETS policy, we published our industrial strategy; it is why I introduced the British industrial competitiveness scheme to reduce energy costs for 7,000 manufacturing businesses; and it is why we increased the supercharger to 90% for energy intensive industries.
Clearly, we recognise that energy costs have been too high in the UK for industrial businesses as well as consumers. That is primarily a result of the policy of the previous Government to leave us at the mercy of petrostates and fossil fuel dictators, on the rollercoaster of fossil fuel prices. The shadow Secretary of State said that my priority is decarbonisation. I happen to be in a place where there is a happy coincidence between energy security, decarbonisation and the lowest cost of energy. That is recognised by industry, and that is why it is Government policy.
Full debate: Draft Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2026
Alongside my right hon. Friends the Secretaries of State for Energy Security and Net Zero and for Business and Trade, I am committed to slashing energy costs for British businesses. From April, eligible energy-intensive industries will see an uplift in compensation for electricity network charges, with 90% of costs being covered. We are also consulting on a British industrial competitiveness scheme that includes our plan to exempt over 7,000 businesses from covering the costs of some our historic renewables levies.
Full debate: Energy Costs: Businesses
The hon. Gentleman raises the issue of energy volatility. I hope that it was clear in my previous answer that the Government are not satisfied with the position as it is. Of course, that energy volatility has historically been caused by our reliance on oil and gas and on petrostates and dictators. Clearly, the Conservatives wish to return to that policy. This Government’s clean power mission will ensure that we have energy security for the future. Unlike the climate-denying policies of the Conservatives and Reform, which would destroy jobs and investment in this country, our policies will deliver energy security and green energy for our small and large businesses, and for domestic consumers.
Full debate: Energy Costs: Businesses
I think this shows how committed the Government are to supporting a reduction in costs across all our services, including education and health, through the installation of solar panels. We saw a massive increase in solar installations in the UK last year—equivalent to enough energy generation to power 2 million homes. Not only do solar installations benefit our domestic consumers and enable the creation of green energy, but by installing solar on rooftops such as those of schools and hospitals, we are taking maximum advantage.
Full debate: Energy Costs: Businesses
All those measures complement the efforts being undertaken as part of the Grangemouth just transition. That is important, because the agreement we have announced today is not just about supporting a single site or a single company; it is about securing a stable industrial pipeline now and for many years to come. It is about having a clean break from the managed decline of the past and delivering the decade of national renewal that we promised for Grangemouth and for the whole UK. For those reasons, I commend this statement to the House.
Full debate: INEOS Chemicals: Grangemouth
I thank my hon. Friend for the close attention he gives to this area through his chairmanship of the Energy Security and Net Zero Committee. He started his question by mentioning the 500 jobs at Grangemouth, which perhaps we have not discussed enough. I really do understand how this announcement from the Government will bring certainty to those workers at Grangemouth as well as their families and their local community. It is incredibly important that we acknowledge that.
Full debate: INEOS Chemicals: Grangemouth
My hon. Friend, through his chairmanship of the Energy Security and Net Zero Committee, is working very hard to highlight the issues of business competitiveness and energy costs to businesses. I would draw his attention to the British industrial competitiveness scheme consultation, which I launched a couple of weeks ago, which is our commitment through the industrial strategy to reduce energy costs for over 7,000 manufacturing businesses by around £40 per megawatt-hour from 2027. I encourage all Members to ensure that manufacturing businesses in their constituencies respond to that consultation.
Full debate: Energy Costs
I do not believe the hon. Gentleman is correct to attribute that cause to carbon taxes or energy costs, but I share his concern about the lack of British steel and other British materials being used in construction projects funded by the taxpayer. I believe that the taxpayer expects materials for such projects to largely be sourced from the UK. That is why I had cause over the last couple of weeks to speak to British Petroleum about its use of Chinese steel in energy projects. I will continue to call in the chief executives of companies and discuss with them how we will increase British content in British projects.
Full debate: Energy Costs
We continue to work with Jingye to find a pragmatic, realistic solution for the future of British Steel. As we have stated previously, our long-term aspiration for the company will require co-investment with the private sector to enable modernisation and decarbonisation, safeguard taxpayers’ money and retain steelmaking in Scunthorpe. Once a solution is found, we will terminate the directions issued to British Steel under the Act and make a statement on the need to retain, or repeal, the legislation.
Full debate: British Steel
Clearly, decarbonisation will require further innovation, and I commend industry and academia on the groundbreaking research they have conducted, which I know my hon. Friend has vigorously supported. I recognise the work of Lucideon; it is an organisation I know well, and it is indeed a world-leading developer of research and innovation for the ceramics sector. I also recognise the work of its AMRICC centre—the Applied Materials Research, Innovation and Commercialisation centre—and the Midlands Industrial Ceramics Group, which have benefited from direct grant support. My hon. Friend also asked about engagement with the National Wealth Fund. I will be happy for my office to provide contact details for a direct conversation to take place.
My hon. Friend made a point about increasing UK capability for defence. She and the ceramics industry may consider responding to a consultation launched by the Ministry of Defence on 23 October on its offset regime, which has the potential to ensure that we get greater investment in industries such as ceramics in our defence supply chains. The Government, particularly through UK Research and Innovation, work with and support such stakeholders to accelerate that kind of research and propel decarbonisation.
Full debate: Advanced Ceramics Industry: North Staffordshire
By bearing down on costs across the energy system, we expect to deliver the BICS and ensure that the scheme is delivered in line with our wider priorities to deliver affordable power for businesses and households. For example, the proposals in the Department for Energy Security and Net Zero’s recent consultations on RO/FiT indexation, if implemented, could contribute to that goal.
Full debate: British Industrial Competitiveness Scheme
I thank my hon. Friend for the significant amount of work she has done and her engagement with me during the preparation of this strategy. She is right to highlight the opportunities at the port of Falmouth. Those opportunities start with critical minerals and perhaps also renewable energy. I intend to visit the port of Falmouth tomorrow and would be pleased to hear more about those opportunities when I am there.
Full debate: Critical Minerals Strategy
I thank the right hon. Gentleman for giving me the opportunity to clarify one point. He has formed the impression from my words, and I apologise if I was not clear, that we would supply only 10% from UK production. It is actually 10% from primary sources—that is, from mineral extraction—and a further 20% from recycling, so it is 30% in total from UK production. He talked about the green energy industries. Of course, these critical minerals are essential for many other industries, such as defence, space and artificial intelligence. In fact, I know how concerned he is about industries like oil and gas—they are essential for those industries, too.
Full debate: Critical Minerals Strategy
I welcome those comments. The hon. Member is right to point out that skills is a cross-Government exercise, and that applies not only to defence skills colleges. Work is done across the two Departments I work in—the Department for Business and Trade and the Department for Energy Security and Net Zero—and skills itself resides in the Department for Work and Pensions, which is where it is co-ordinated. Moving skills into that area and having the co-ordination there is exactly right. I also meet Defence Ministers to discuss this issue; many of these skills are transferable across industries, and we want to ensure that people can transfer across from different industries. A couple of weeks ago I launched the clean energy jobs plan, which provides support for people to move out of the oil and gas sector, for instance, and into clean energy industries. I thank the hon. Member for raising that issue.
Full debate: Specialist Manufacturing Sector: Regional Economies
In response to earlier questions, I outlined the British industrial competitiveness scheme, which we announced in our industrial strategy. That will extend support to a wider range of businesses. We recognise the issues that businesses are facing with high energy prices, primarily as a consequence of the previous Government’s policies not to invest in renewable energy. We are changing that by investing in British home-grown renewable energy.
Full debate: Topical Questions
As my constituency neighbour has said, the green energy industry in his constituency is delivering thousands of jobs. On this issue, certainly, I am very happy to be stuck in the middle with him.
Full debate: Topical Questions
Finally, the shadow Minister can debate the nuances of carbon taxes if he wants to, but this plant exports all its product to the EU. To do that, the plant needs to ensure that the product aligns with the market in which it finds itself, which obviously has the EU emissions trading system. If it received relief in the UK, it would have to pay that tax to the EU. Does the hon. Gentleman prefer that that money comes to the UK Government or that it goes to the EU?
Full debate: ExxonMobil: Mossmorran
I agree with the hon. Member that at its crux there has been a failure of long-term planning in industry. We can see that when we contrast the two ethylene plants in Scotland. The plant at Grangemouth imports a lot of its ethylene from the US, which is in plentiful supply and comes at a much lower cost. That required a significant investment in the port infrastructure at that plant. ExxonMobil was aware that, in order to ensure that Mossmorran was sustainable, it would need to make a similar investment. It would have been possible for it to have made that investment some years ago, but at this stage, an investment of about $1 billion that would not come to fruition within the next five years is judged by the company not to be sustainable. Of course businesses require some certainty in order to invest; I made that point at Energy questions this morning. The certainty provided by our industrial strategy—in particular, this Government’s commitment to renewable energy technologies—is allowing investment to come in.
Full debate: ExxonMobil: Mossmorran
The hon. Member mentioned, in particular, some of the policy situation relating to Mossmorran, and I refer her to the answer I gave a short while ago when talking about the impact of carbon taxes on Mossmorran arising directly as a result of the inefficiency of the plant. That is a consequence of previous decisions and a failure to invest in that plant. It ultimately means that the plant appears to be, in and of itself, not commercially viable. If companies that think they could make the plant commercially viable come forward, clearly we would want to work with such organisations.
Full debate: ExxonMobil: Mossmorran
I know from my time in industry that what business and industry need in order to invest is certainty, and this Government have provided that certainty. Over £52 billion of private sector investment has been won into clean power, thanks to the certainty of our clean power mission. That is why the Conservatives’ decision to trash our reputation as climate leaders was roundly rejected by business groups and the energy industry. We are delivering jobs and growth; they would put all of that at risk.
Full debate: Clean Energy: Private Sector Investment
The hon. Gentleman is indeed right that the skills of the North sea oil and gas workers are essential for the green transition. We will come forward with our North sea plan shortly. I am sure that he will want to take this opportunity to welcome our clean energy jobs plan, which highlights not only the many thousands of jobs across Scotland that the clean energy industries are creating, but the support that the Government are giving people in those industries to transfer across to new green energy industries.
Full debate: Clean Energy: Private Sector Investment
I acknowledge the work the hon. Member does in Parliament on energy-related issues and her Adjournment debate on high street businesses; that theme clearly runs through a lot of her work. She is right to point out the fundamental weakness we have that, when it comes to our investment in renewable energy, the price is ultimately set by gas. We want to address that through our clean power mission.
Full debate: Energy Costs: Support for Businesses
I do understand just how important the hospitality sector is to the hon. Member and her constituents, as a major part of the local economy. The Government’s clean power mission—investing in renewable energy, lifting the onshore wind ban and investing in offshore wind at pace—is bringing down energy costs and will bring down energy costs from 2030 onwards. The crucial challenge is how we help businesses to manage the transition between now and 2030. Measures such as the British industrial competitiveness scheme, which was announced in our industrial strategy, will support over 7,000 businesses across the country.
Full debate: Energy Costs: Support for Businesses
An investment in fighting the climate crisis, and in net zero, is fundamentally an investment for our future generations. The economic opportunity before us can improve the lives of working people not only in the future but here and now, and our policies are intended to do precisely that. We want to tackle the climate crisis while ensuring that we crowd-in private sector investment. In Prime Minister’s questions earlier, my right hon. and learned Friend the Prime Minister mentioned the £33 billon investment from SSE; the pursuit of net zero is clearly the pursuit of economic prosperity. Members have already mentioned the fact that the Confederation of British Industry says the green economy is growing three times faster than the rest of the economy, as are the good jobs provided by the green energy sector around the country.
Carbon budgets were a significant part of the debate. Ten years ago, the world was on course for 4° of warming, which would have posed a severe threat to human life. Today, through international action, we are on course for 2.6°, or below 2° if countries meet their full climate commitments. I was asked earlier about the Government’s focus at COP; fundamentally, our focus is multilateralism to get the world working together again. Of course, that is about ensuring that Britain retains its place as a climate leader, and that we do so in a way that supports communities and families through the UK’s transition.
Full debate: Carbon Budget Delivery Plan
The Government’s approach to the transition is about incentives rather than punishments—it is about carrots rather than sticks. The economics are working in the direction of net zero, and net zero is no longer a political discussion, wherever the Opposition think they are. Net zero is an economic discussion, and one in which industry has been quite clear about where the benefits lie. As industry is decarbonising, it is also digitising, automating and becoming more productive. That is what will fundamentally drive down costs for consumers and provide good jobs.
Essentially, we have a choice ahead of us about the type of country that we become. We can either seize this opportunity and capture international investment, which is going two to one into green energy versus fossil fuel energy, or take the regressive approach of the Opposition, which leaves us at the mercy of petrostates.
Full debate: Carbon Budget Delivery Plan
We continue to work with Jingye to find a pragmatic, realistic solution for the future of British Steel. As we have stated previously, our long-term aspiration for the company will require co-investment with the private sector to enable modernisation and decarbonisation, to safeguard taxpayers’ money and to retain steelmaking in Scunthorpe. Once a solution is found, we will terminate the directions issued to British Steel under the Steel Industry (Special Measures) Act 2025 and make a statement on the need to retain, or repeal, the legislation.
Full debate: British Steel
The Department for Energy Security and Net Zero has published a consultation seeking views on the proposal to amend the inflation indexation of the renewables obligation from the retail price index to the consumer price index. The proposals in the RO indexation consultation, if implemented, could contribute to bearing down on costs across the energy system.
Full debate: Network Charging Compensation Scheme Uplift
Before I talk more broadly about the challenge of decarbonisation, I will briefly set out the role that the cement sector plays in the UK. Cement is of course an incredibly ancient material, which was developed and used extensively across Europe by the Romans. However, it would be wrong to think of it as a material of the past. It is subject to constant innovation, as we heard from my hon. Friend.
My hon. Friend outlined the challenge of decarbonisation, and we need to find a way for the UK cement industry to cut emissions in the future. He mentioned that it is a very energy-intensive energy, and he rightly pointed out that the challenge in decarbonising cement is due to the calcination process in the manufacture of clinker. I have no extreme desire to turn the House into a lecture theatre, but it may be helpful to dwell for a moment on the chemistry of cement production.
That problem was recognised a few years ago by none other than Bill Gates. We imagine that Bill Gates goes to very exciting parties in California, but maybe they are not as exciting as we might think. He says that when he is at a barbecue with friends talking about decarbonisation, as they often do, his friends say to him, “Bill, decarbonising steel is very difficult,” and I know that is true from my career. He always says to them, “If you think decarbonising steel is difficult, decarbonising cement is almost impossible.” This is a challenge that even Bill Gates finds it difficult to address.
However, the UK has always been a pioneer in overcoming such challenges. As we have heard, many technologies have been developed in the UK, and I will expand on those in a moment. The UK has been a pioneer in cement, too. The invention of Portland cement 200 years ago by William Aspdin sparked a construction boom that shaped the country that we know today. That is what we need to harness now: innovation to face the challenge of decarbonisation. I will outline some of the progress that the industry and Government are making. There are, essentially, three opportunities for us in decarbonisation. The first is reformulating cement, so that it intrinsically has less carbon. The second is reduction—using less cement on each construction project. There are a number of ways of doing that. The third, which my hon. Friend described extensively, is carbon capture, which is a good place to start.
My hon. Friend spoke of the Peak Cluster carbon capture utilisation and storage project, which is partly located in his constituency. As he mentioned, the project has been developed outside the Government’s carbon capture usage and storage cluster sequencing process. It is an important project that aims to store over 3 million tonnes of carbon dioxide from the cement and lime factories that support jobs across Derbyshire, Staffordshire and the north-west. It could potentially decarbonise around half of our cement industry.
Between the cement technologies and the reduction in cement that I mentioned, we could reduce carbon dioxide emissions per tonne and overall by around 40%. Of course, that leaves a residual amount for which carbon capture and storage, either through a pipeline or some other transport network, would be required.
The previous Government accepted that decarbonisation meant de-industrialisation; this Government do not. Through our industrial strategy, we are taking action to reduce industrial electricity prices. We are consulting on uplifting the network charging compensation scheme, a component of the British industry supercharger, from 60% to 90%, and we will publish a response shortly. The Government will also introduce the British industrial competitiveness scheme from 2027, which will reduce electricity bills by up to 25% for over 7,000 eligible British businesses.
Full debate: Decarbonisation of Cement
That is why on 19 October, the Department for Energy Security and Net Zero published the clean energy jobs plan. It sets out how the Government will work in partnership with industry and trade unions to help workers in all parts of the country to benefit from these opportunities—supporting our existing workforce to find new opportunities, training up the next generation, and helping our young people to get good, unionised jobs.
To deliver not just jobs, but good jobs, we will support greater trade union recognition and promote collective bargaining across the clean energy sector as a mechanism to facilitate engagement with industry, improve job quality, secure fair work and build a resilient workforce. We will also embed trade union representation across DESNZ governance, and close loopholes in legislation to extend to the clean energy sector employment protections, including the national minimum wage, enjoyed by offshore oil and gas workers working beyond UK territorial seas. We will leverage additional private investment into skills and strengthen workforce protections, through introducing workforce criteria across relevant Department for Energy Security and Net Zero grants and procurements, including in the clean industry bonus. We will develop a fair work charter with the wind sector and trade unions, which outlines a sector-wide commitment to provide high-quality employment through the CIB, and we will improve the inclusivity and visibility of clean energy job opportunities through a new social inclusion forum and an industry-led public awareness campaign.
To ensure benefits for every nation and region, we will: work with local areas to develop our regional mapping of clean energy jobs; establish a skills forum and a net zero network to bring together representatives of industrial strategy zones across the UK; work closely with local growth plans; and utilise the Department for Energy Security and Net Zero’s local net zero delivery group and ministerial-led mayoral roundtables to identify opportunities for collaboration and alignment between central and regional Government.
Full debate: Clean Energy Jobs Plan
As we have stated previously, our long-term aspiration for British Steel will require co-investment with the private sector to enable modernisation and decarbonisation, support jobs, safeguard taxpayers’ money and retain steelmaking in Scunthorpe. However, this will not be without challenges. Jingye acquired a troubled business in 2020 and it has faced challenging market conditions and circumstances in the years since. The company has not been able to overcome these difficulties and achieve profitability at British Steel. But this Government remain committed to restoring the long-term viability of steelmaking at Scunthorpe, and the UK steel sector as a whole, and we continue to see tangible benefits resulting from the wide-ranging actions we have taken, such as tackling high electricity prices via the uplift to the British industry supercharger and changing Government procurement rules.
Full debate: British Steel
We want to make sure that businesses benefit from our clean energy mission, especially those in vital industries such as brewing. Our forthcoming carbon budget and growth delivery plan and our refreshed industrial decarbonisation strategy will help to provide further clarity for such businesses, including on how we intend to support them to electrify.
Full debate: Breweries: Carbon Emissions
I commend Asahi, which I know is an important employer in the hon. Member’s constituency, for its work on decarbonisation and also for being my favourite Japanese beer. In a previous life, I worked as a fitter’s mate in a brewery, and I know how difficult it is to decarbonise the process there. Maybe it is something I should learn more about, and I would be very happy to come along to Asahi if I were invited.
Full debate: Breweries: Carbon Emissions
I am delighted that my first outing at the Dispatch Box is to answer a question from my hon. Friend, and on a topic that we have worked on so much over the past year. We on the Labour side know that net zero is the greatest economic opportunity of our generation. Unlike the previous Conservative Government, which allowed industry to wither, we do not accept that decarbonisation means deindustrialisation. Through our modern industrial strategy, we are working with business to help it to invest, grow and meet our climate ambition.
Full debate: Net Zero: Impact on Manufacturing
It is no wonder that there is so much laughter around the Chamber, because the policies of the previous Conservative Government saw industry decline. They were prepared to let industry decline because, fundamentally, they do not believe in industry, and now we find that they do not believe in climate science. We on this side of the House know that we can achieve decarbonisation in this country by winning investment from industry—investment that is coming in from all around the world. Our policies are giving industry the confidence to invest in creating jobs here in the UK.
Full debate: Net Zero: Impact on Manufacturing
The people of Teesside know that our future is about decarbonising. This Government have invested £4 billion in carbon capture and storage. We have the largest offshore wind monopile factory in our area, and we are producing green hydrogen in Billingham in my constituency—in fact, Billingham produces 50% of the UK’s hydrogen, and Billingham and Teesside more generally is set to become Europe’s main centre for sustainable aviation fuel.
I am sure that sustainable aviation fuel will be produced in Grangemouth, Humberside, the north-west and south Wales, but the market is enormous and, as we heard from my hon. Friend the Member for Middlesbrough South and East Cleveland (Luke Myer), Teesside and Billingham in my constituency is best placed in the whole of Europe to deal with this. The biggest threat to that at the moment is not the fantastic plans of this Government, but the ideological adherence of members of Reform to anti-net zero. As usual, I find myself in this House standing up for new jobs for industrial communities in my area, alongside my hon. Friend the Member for Middlesbrough South and East Cleveland. Where are the Reform Members? They are not here—they are never here.
Full debate: Sustainable Aviation Fuel Bill
Therefore, I do not envy the position of my hon. and right hon. colleagues in the Department for Business and Trade, who are wrestling with this legacy. Essentially, they are putting out the fires of the previous Government, and we will see, when the steel strategy has been brought forward, how we can create a bright future for the industry. We need to do that, and I support the calls to do it, but I think that the challenge is not actually about adherence to net zero; it is about adherence to a different ideology, which has been to assume that the steel industry operates in a free market and that we can treat it as such. It does not. Other countries around the world support their steel industries, so we need to create a level playing field for investment in our steel industry, too. If we do that then we can attract billions of pounds of private sector investment into our industry, as countries such as Austria, Sweden, Germany, France and so on do.
Full debate: Steel Industry