Henry Tufnell is the Labour MP for Mid and South Pembrokeshire.
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For British industries included in its scope, a CBAM means they can compete on a level playing field with industries in the global market. It works by applying a charge to the carbon emitted during the production of imported carbon-intensive goods. That ensures that our domestic producers do not face higher production costs compared with their foreign competitors operating in countries where the price of carbon is lower. That is critical, for without a CBAM, those industries will go elsewhere, moving production to low-regulation, high-emission countries. We would lose jobs, investment and our industrial base while simply offshoring our emissions. That is carbon leakage: decarbonisation at the cost of deindustrialisation. It would be devastating for industrial communities across the country, in my constituency of Mid and South Pembrokeshire. That is why I call on the Government to expand the scope of the CBAM to include the oil refining industry.
The transition to net zero must be a just one. It cannot come at the cost of deindustrialisation and greater economic deprivation in communities like mine. As the party of working people, it is incumbent on this Labour Government to manage this energy transition by protecting the jobs and skills base of today while building the industries of tomorrow. Recent global events have shown once again how trade flows can change overnight, threatening our energy security and directly impacting the cost of living for our constituents. As a Government, we must be agile in responding, providing the support and certainty our communities and industries need to weather the storms.
A CBAM can provide targeted support to industry during turbulent times. However, the Bill in its current form requires the effectiveness of the CBAM to be reviewed only after five years. I hardly need to remind the House how dramatically the geopolitical landscape can change in that time. That is why I urge the Minister to consider making provision for yearly reviews of the CBAM during its first five years. This would allow the Treasury to respond to unforeseen events and ensure that the CBAM continued to achieve its objective, minimising the risk of carbon leakage for carbon-intensive industries in the UK, so that our decarbonisation efforts could lead to a true reduction in global emissions rather than simply displacing carbon emissions overseas.
We are at a critical juncture for British industry. Decisions made by this Government will shape the UK’s ability to safeguard industrial jobs and maintain global competitiveness while meeting net zero objectives and creating jobs for the future without simply offshoring our emissions. This Bill continues the Government’s work to build a stronger, fairer country by growing our economy, raising living standards and, crucially, investing in our public services. The introduction of the CBAM is a vital part of this broader package of measures, but I urge the Minister to consider expanding its scope and reviewing it annually to ensure that it delivers on its important objectives in a rapidly changing world.
Full debate: Finance (No. 2) Bill
I like my constituency neighbour, the hon. Member for Caerfyrddin (Ann Davies), and Plaid wants to be taken seriously as a party of government, but it fails to recognise the importance of the role that renewable energy will play. Does the Secretary of State agree with RenewableUK Cymru, which recently concluded that Plaid’s approach would cost jobs and investment in communities such as mine in Pembrokeshire?
Full debate: Energy Infrastructure: Pylons
I commend the Secretary of State for his statement. I share his view that we have a responsibility to generations to come, and my constituents want to be part of a just transition. Is he committed to a just transition that protects jobs and prevents decarbonisation through de-industrialisation?
Full debate: State of Climate and Nature
Q5. More jobs, cheaper bills: that was our promise on net zero. If we cannot meet those goals, we must consider our approach. In Pembrokeshire we have a proud industrial history rooted in oil and gas, and an incredibly exciting opportunity in respect of floating offshore wind in the Celtic sea. Can the Prime Minister assure me that he is committed to a just transition that protects and creates jobs?
Full debate: Engagements
And of course there is our climate crisis: wildfires in California, torrential rain in Spain, and extreme heatwaves and longer droughts. Even walking through the village of Angle in Pembrokeshire with members of the local community council, it is all too easy to see the increase in frequency of flooding, not to mention its damaging impact on residents and local farmers.
Prior to the general election of 4 July, my right hon. Friend the Chancellor set out her economic vision of securonomics: we would make, sell and buy more in Britain, and so deliver energy security and create good, well-paid jobs while tackling the climate crisis. My Labour colleagues and I stood for election on that manifesto, and it is time to deliver. At a time when the challenges are so great and the need for leadership is so acute, it is vital that the Crown Estate has greater scope to rise to those challenges and do its part for the revitalisation of our great nation.
Under amendment 5, the commissioners must have regard to net zero, regional economic growth and energy security. It would not impede the independence of the Crown Estate, but would provide unambiguous purpose and direction on an otherwise undefined and unexplained term. It should therefore be welcomed.
Full debate: Crown Estate Bill [Lords]
Off the back of Labour’s resounding victory last July, we know there is democratic consensus across the nation on our economic vision, which promotes energy security, regional economic growth and net zero, yet the Crown Estate appeared to be relying on the window dressing of ESG standards to obfuscate its desire to maximise its 12% of profits, at the expense of our nation.
Full debate: Crown Estate Bill [Lords]
Furthermore, other Government agencies and Departments have to take account of this economic vision. In its latest contract for difference round, the Department for Energy Security and Net Zero set a criterion of achieving shorter supply chains, in order to ensure that manufacturing facilities, installation firms and ports are located in areas of deprivation. It also adheres to science-based targets, which are goals that businesses set to reduce their greenhouse gas emissions in line with obligations under international treaties, so that we can reach net zero by 2050.
The national wealth fund has an overall goal of increasing investment in resilient and sustainable infrastructure to support the UK’s net zero transition, and to contribute to improved local economic opportunity and productivity. In partnering with the private sector and local government, the national wealth fund has two clear strategic objectives: to tackle climate change and to support regional and local economic growth.
Great British Energy facilitates, encourages and participates in the production, distribution, storage and supply of clean energy, the reduction of greenhouse gas emissions, improvements in energy efficiency and measures for ensuring the security of energy supply.
Full debate: Crown Estate Bill [Lords]
In our United Kingdom, one of our biggest and most powerful natural resources is wind. To cut bills, deliver energy security and achieve net zero, we have to become to wind what Saudi Arabia is to crude oil. Off the coast of my wonderful, coastal, diverse and rural constituency of Pembrokeshire, we have an abundance of wind, but thankfully not much hot air. However, 12 miles offshore—where that glorious wind blows with such regularity, majesty and force that it would make Aeolus proud—the seabed is owned by none other than the Crown Estate.
In the past few years, creativity in international industrial policy has moved on, leaving the UK in danger of trailing behind. The United States and the European Union are actively incentivising investment in domestic supply chains, justified by their need for national energy security and urgent acceleration to net zero. To keep pace internationally, we must grasp the nettle and do it fast. The Crown Estate must utilise its own financial resources to make enabling investments that crowd in private investment into UK supply chains, such as ports and other coastal facilities for floating wind.
Over the last year I have been doing everything I can to engage constructively with the Crown Estate, but, unfortunately, I have yet to secure any assurances that it will utilise its financial resources for the benefit of our energy security, our jobs of the future and our acceleration to net zero. We cannot sit by and let the conflict between raising national income via annual option fees and incentivising early investment to develop regional supply chains ruin the chances of bringing children out of poverty and giving young people in areas such as mine back home in Pembrokeshire good, secure, long-term and well-paid jobs.
The Bill should give full rein to the Crown Estate to explore all such options to maximise domestic supply chains, particularly for floating offshore wind. The population of south Wales and the south-west will never forgive us if we do not seize this once-in-a-lifetime opportunity to redevelop their regional economies. The Crown Estate has an absolutely pivotal role to play here, and one that speaks to all the King has done across much of his career to address climate change and align business interests with the rejuvenation of economically deprived regions.
There should also be consideration of non-price factors in lease auctions, especially weightings allocated to the sustainability of supply chains, which would give a lifeline to communities in Port Talbot, and the resilience of supply chains, also known as energy security, which are likely to favour geographical port-to-offshore project sites such as my own in Milford Haven in Pembrokeshire. There have been examples of and precedents for this, as in the recent EU Net-Zero Industry Act.
We need this Bill to equip the Crown Estate with powers to introduce non-price factors more directly into the seabed rights auction process—for example, by offering a fee discount, as is done in the United States, for supply chain investments that reduce the risk of offshore wind projects being delayed due to international supply bottlenecks, which in turn would accelerate our progress to a net zero power sector and protect UK energy security.
Full debate: Crown Estate Bill [Lords]
In my constituency, in Pembrokeshire, one in four children is living in poverty, and these serious systemic issues stretch back over multiple generations. The oil and gas industry radically transformed my constituency, but over time we have gone from having four oil refineries to having just one. We have transferred into natural gas—we have liquefied natural gas—but the challenge, as a result of that decline, is to work out what the alternative is for people in my constituency. How can we ensure that the brightest and the best can remain in the county, succeed in the jobs of the future and see that just transition happen?
We have been partnering with the Crown Estate and looking at supply chains. We have to tackle the issue of ports. We have to look at CfD and, fundamentally, at the picture on skills. At the end of 2023, there was a total of about 230 MW net of installed floating offshore wind. There was 101 MW in Norway, 78 MW in the UK, 25 MW in Portugal, 23 MW in China, 5 MW in Japan, and 2 MW in both France and Spain. It is unusual, and incredibly exciting, that the UK can play its part in leading on a technology. Not only are we at the forefront of this transition and of combating the global challenge of climate change, but we are looking to play our part in the reindustrialisation process.
On the topic of grid, capacity is a real difficulty and will be a real challenge. We have a grid connection in Pembroke coming out of RWE at the Pembroke Net Zero Centre. If we can get that pipeline, the power coming off these turbines will be phenomenal and could meet half the UK’s power needs. We have to meet that challenge, so I am glad the Labour Government are taking the bull by the horns, if that is the right expression, by attempting to change the national grid.
Full debate: Floating Offshore Wind: Celtic Sea
The latter part of the 20th century saw the rise of the oil industry and the transformation of Pembrokeshire’s economic fortunes, with four oil refineries on stream by the early 1970s. Oil has given way to gas, and the Port of Milford now has two liquefied natural gas terminals, one gas-fired power station and one oil refinery. More than 20% of the UK’s energy comes through the port. With the rise of renewable energy and the potential for floating offshore wind in the Celtic sea, we are in a unique position to give true meaning to the term a “just transition”. We have the talent, the skillset, the resources, and I will use my voice in this House at every given opportunity to ensure that Pembrokeshire will not only benefit from but spearhead the industries of the future.
Full debate: House of Lords (Hereditary Peers) Bill
I welcome the Government’s announcement on moving forward with the track 1 projects, which will create thousands of well-paid jobs, attract inward investment and accelerate us towards net zero. With the closure of the blast furnace at Port Talbot, the two largest carbon emitters in Wales are now in my Mid and South Pembrokeshire constituency, but they have no access to pipeline CO 2 transport. What measures is the Secretary of State taking to encourage the decarbonisation of sites such as those in Pembrokeshire, which rely on non-pipeline solutions for CO 2 transport, to achieve a just transition?
Full debate: Carbon Capture, Usage and Storage