Robert Jenrick is the Reform MP for Newark.
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There was nothing about scrapping electric vehicle mandates, bringing down energy costs by getting rid of net zero targets, or bringing down the cost of employing people by getting rid of the increase in employers national insurance. Is it not the truth that it is the Government who are killing the British car industry, and they need to wake up and take action?
Full debate: Economic Growth
I will give the hon. Gentleman a second thing we would do: scrap net zero, so that we end the deindustrialisation of our country. Steel, chemicals, fertilisers, glass, ceramics, car making: 2 million jobs depend on high-energy intensive industries. All will be gone within the next 10 years. I wager that many Labour Members represent the good, decent, patriotic Brits who work in those businesses. They are selling them down the river. We need to end net zero and adopt a pragmatic and intelligent way to decarbonise our economy that does not immiserate working people and ruin what remains of our heavy industry. Those are two things that we could do.
Full debate: Backing Business to Create Economic Growth
Madam Deputy Speaker, can I begin by thanking you—and, through you, Mr Speaker—for granting me this Adjournment debate? It is unusual to allocate Adjournment debates to members of the shadow Cabinet, but I want to raise this important matter on behalf of my constituents. I have written to the Secretary of State for Energy Security and Net Zero on a number of occasions asking him to meet me, but he declined to do so.
Full debate: Solar Development: Newark
My hon. Friend makes an important point. The answer is no. If we want to pursue net zero— even with the zealotry of some in the Government—we have to strike a balance. It is not being pursued in a proportionate and sensible way. It is alienating people— thousands of people in my constituency—many of whom feel passionately about this issue but do not want to see their countryside destroyed and their quality of life ruined.
Full debate: Solar Development: Newark
The general election made a number of things clear to me. I am deeply proud of many of our Government’s achievements, which I will fiercely defend in the months and years ahead. We took a bankrupt country and righted our public services and public finances. We ensured a decade of good employment after inheriting high unemployment, particularly among young people. We led Europe in the defence of Ukraine. We reformed our education system, and we now outstrip countries all over the world in the literacy and numeracy of our children. We were one of the world’s greatest countries in tackling environmental challenges, decarbonising faster than any other G7 country. For those and other reasons, I will always defend the record of the last Conservative Government, but I will come on to some of the lessons I have learned from their failings.
Full debate: Debate on the Address
I worry that this King’s Speech falls short on some of those great challenges. There are undoubtedly Bills that I welcome, and I am delighted that the new Government are taking forward the Bill for a Holocaust memorial, a project in which I have been involved for many years. Some of the Bills are radical, such as the changes to our energy policy, and I worry that they are radical for all the wrong reasons. Despite having decarbonised faster than other countries, and despite being responsible for only 1% of global emissions, we now find ourselves with a Government pursuing, for ideological reasons, a net zero policy that will make it harder for our own consumers to afford their bills. The policy will further erode our industrial base and leave us in hock to Chinese technology. We are trading dependence on Russian hydrocarbons for dependence on Chinese electric vehicles, smart meters and solar panels that will despoil our countryside. New quangos, such as Great British Energy, will spring up, serving no apparent purpose and taking inspiration from predecessors such as Robin Hood Energy in Nottingham, in my part of the world. That failed project wasted £50 million of taxpayers’ money.
Full debate: Debate on the Address
My hon. Friend knows that I am the last person to be a nimby, and Nottinghamshire’s heritage is among the richest for industry and energy production—it dates back centuries—but the point that our right hon. Friend the Member for Ludlow (Philip Dunne) made could equally be applied to the situation in Nottinghamshire. We are not opposed to solar farms. The issue is the scale of the applications and their aggregate impact on the landscape, which is profound. Were the three applications in my constituency to go ahead—I know that one borders the constituency of my hon. Friend—they will stretch from the South Yorkshire border all the way down to the Vale of Belvoir, peppering thousands of acres of land and impacting more than 60 villages. The landscape of that part of Nottinghamshire will be changed for a generation. That is simply unfair and exactly what my right hon. Friend the Prime Minister has campaigned against—an over-zealous application of net zero, which turns the public off.
Full debate: Large-scale Solar Farms
We have just heard from the Opposition that they have no plan at all. They said that even if the Rwanda scheme was working and having the deterrent effect we all want, they would still scrap it, because ultimately they do not believe in border security and they cannot be trusted to protect our borders. But this problem is not going away. It is going to be one of the defining issues of the 21st century. There are millions of people on the move—some are fleeing climate change and persecution, while others are economic migrants understandably in search of a better life. It is a great compliment to our country that so many want to come here, but it is not sustainable.
Full debate: Safety of Rwanda (Asylum and Immigration) Bill
My right hon. Friend raises an important point. There is some evidence that hostile states are using migration as a weapon against countries such as the United Kingdom. The new Home Secretary in his former role and I in my role as Immigration Minister have been to many countries in north Africa and beyond, and time and again we have seen persistent conflicts, climate change and instability driving migration. That is going to be one of the features of the 21st century, and that is why we want to be a strategic partner to those countries, using our diplomacy and our overseas development aid budget to support refugee-producing countries and crucial transit countries such as those in north Africa for mutual benefit.
Full debate: Net Migration Figures
The barges and ferries that the UK Government are looking at have in many cases been used by British workers, such as those working on large construction sites, or oil and gas projects. Indeed, some are ferries that have been used for police and other staff at the Olympics or at COP26 in Glasgow. It would therefore be wrong to characterise them as inhumane or indecent. That is not the intention of the Government.
Full debate: Asylum Seeker Accommodation Off Wirral Peninsula
Secondly, economic growth is stagnant. That should worry us the most in the long term. The economy needs to generate the good jobs and tax receipts to help people into good careers and fulfilling lives and to pay for public services. In an era when public services will only cost more with an ageing population, and given the urgent need to invest in our transition to net zero and the desire shared across the House to invest in levelling up and greater productivity, we will need those tax receipts more than ever. Yet they are not forthcoming. If the Bank of England and the Office for Budget Responsibility forecasts are to be believed—they have been wrong in the recent past—we will experience several years of anaemic economic growth. We have to come together to tackle that.
Full debate: Debate on the Address
Our commitment to net zero is not in any sense incompatible with making use of our domestic reserves. Otherwise, we will simply be reliant on imported gas from Putin and the Gulf, creating insecurity and greater emissions in the process. If we want our oil and gas companies to invest, we need to provide them with certainty. Will my right hon. Friend reaffirm the principles that I committed to as Exchequer Secretary, as other Treasury Ministers did: fiscal stability and maximising economic recovery in the North sea basin? It is through that combination that we can encourage our world-leading oil and gas companies to invest for the future.
Full debate: North Sea Oil and Gas
The Prime Minister is right to say that the whole country should take pride in the manner in which the UK has hosted the COP talks in the last few weeks. One of the elements that distinguished COP26 from previous COPs was the much greater and more meaningful involvement of business. How can we ensure that that continues and becomes one of the defining characteristics of the remainder of the UK’s COP presidency?
Full debate: COP26
We have also made a number of environment-related changes, including on flood risk and climate change. These changes are an initial response to the emergent findings of our joint review with the Department for Environment, Food and Rural Affairs (DEFRA) of policy for building in areas of flood risk. For instance, highlighting the opportunities from improvements in green infrastructure and natural flood management techniques. We are also amending guidance on flood risk to emphasise that checks done by local authorities should steer new development to areas with the lowest risk of flooding from any source.
Full debate: Building Beautiful Places
We will modernise the planning system, ensuring a simpler, faster and more predictable system that delivers more homes, more infrastructure, such as schools and hospitals, and honours our commitment to net zero and the environment. Our reforms will also make the planning system more accessible through digital plan making, ensuring more local people—more than the 1% who currently engage with the planning system—can get involved. We are taking power out of the hands of the big developers and giving it back to local communities and small builders so that, together, we can build back better.
Full debate: Planning System Modernisation
The other thing that the Bill will do is empower local people to set standards for beauty and design in their area through design codes that developers will have to abide by, putting beauty at the heart of our planning system for the first time, and embedding the work of the late Sir Roger Scruton and everyone who was involved in the Building Better, Building Beautiful Commission in the planning system as a matter of law. There will also be a greater emphasis on better outcomes, rather than simply on process, to protect and enhance the environment. We will ensure that biodiversity net gain is met, we will ensure that all streets are lined with trees, and we will deliver on net zero homes as a matter of national priority.
Full debate: Affordable and Safe Housing for All
Thirdly, in line with the commission’s recommendations, we have produced the first national model design code. We agree with the commission’s view that the use of local design codes, in which communities have a say, is an effective way of setting design expectations that will shape and deliver beautiful homes and places. Whereas a design guide sets out high level principles of good design, a design code sets out illustrated design requirements that provide specific, detailed parameters or constraints for the physical development of a site or area. The national model design code provides a clear framework setting out the parameters that contribute to good design and a step-by-step process for local authorities to follow to produce their own local codes and guides. We have made clear in the national planning policy framework that all areas should produce their own codes or guides, based on the principles set out in the design code. The Prime Minister also recently set out his 10-point plan for a green industrial revolution, which will create, support and protect hundreds of thousands of green jobs, whilst making strides towards net zero by 2050. This includes plans to make cycling and walking more attractive ways to travel, making our homes, schools and hospitals greener, warmer and more energy efficient and protecting and restoring our natural environment, planting 30,000 hectares of trees every year, while creating and retaining thousands of jobs. This vision is at the heart of the national model design code which puts a strong emphasis on building greener and more energy-efficient developments.
Full debate: Design and Building Standards
Some 40% of the UK’s energy consumption and carbon emissions arise from the way buildings are lit, heated and used, and homes—both new and existing—account for 22% of emissions. Therefore, if we are to meet our ambitious target to reduce the UK’s carbon emissions to net zero by 2050, we must improve the minimum energy efficiency standards of new buildings and homes. By improving energy efficiency and moving to cleaner sources of heat, we can reduce carbon emissions, lower energy consumption and bills for households and ensure that we will be the first generation to leave the environment in a better state than we found it.
The future homes standard will deliver a considerable improvement in energy efficiency standards for new homes. We expect that homes built to the future homes standard will have carbon dioxide emissions 75% to 80% lower than those built to current building regulations standards, which means they will be fit for the future, with low carbon heating and very high fabric standards. The interim uplift to energy efficiency requirements will act as a stepping stone towards the full future homes standard, and should result in a meaningful and achievable 31% in carbon emissions savings compared to the current standard. We anticipate that a two-stage approach to implementing the future homes standard will help to prepare the necessary supply chains and appropriately skilled workforce by encouraging the use of low-carbon heating in new homes, while accounting for market factors.
Full debate: Building Regulations: Future Homes Standard and Future Buildings Standard
Thirdly, building homes around our transport hubs will help us to deliver our ambition to tackle climate change by offering greater access to more sustainable forms of transport and reducing unnecessary journeys.
Full debate: Housing
As we have set out time and again, we are committed to net-zero homes—we do not want to see any new home built in this country that needs expensive retrofitting in future. If anyone thinks that the Labour party is going to deliver that or indeed any other strategy for homes in this country, they will be “sorely disappointed”—those are the words of The Guardian , not myself. The hon. Lady said that it would be years before she was able to bring forward any plans for housing whatsoever. What a sad indictment of the Labour party—the party of Herbert Morrison and Clement Attlee. We are planning to build a million new homes in this country; the Labour party’s plans are as empty and vacuous as a Wendy house blown over in the first gust of autumn wind.
Full debate: Topical Questions
Our proposed future homes standard will ensure all new homes from 2025 result in at least 75% lower carbon emissions than those built to the current standard. Earlier this month, the Chancellor announced £8.8 billion of new infrastructure, decarbonisation and maintenance projects, including a £3 billion green investment package, which could help support around 140,000 green jobs, and upgrade buildings and reduce emissions.
Full debate: Housing: Environmental Standards
I can give this assurance to the hon. Gentleman: the planning reforms that we intend to bring forward in the weeks ahead will not row back on any of our commitments to the environment. This Government want to bring forward homes that are truly fit for the future. We do not want to see homes being built in the years ahead that will need to be retrofitted at huge expense either to the state or to individuals in time. We want to ensure that we meet our obligations to the environment, to biodiversity and to the climate change challenge, and that is exactly what the proposals that I intend to publish later this month, or at the beginning of August, will do.
Full debate: Housing: Environmental Standards
We are backing a broader green revolution, including plans to establish a net-zero development in Toton in the east midlands, which I hope will be one of Europe’s most exciting new environmentally sustainable communities. We are seeking to establish similarly high-quality and environmentally sustainable communities through up to four new development corporations in the Oxford to Cambridge arc: around Bedford, St Neots and Sandy, Cambourne, and near Cambridge.
Full debate: Planning for the Future
Using new technologies such as air source heat pumps and the latest generation of solar panels, developers will need to ensure they are doing their bit to tackle the threat of climate change.
Full debate: House Building and Planning
The illustrated National Design Guide emphasises the importance of responding positively to context, creating locally distinctive character, building strong communities, responding to future issues such as climate change and ensuring places sustain their quality. Alongside it, we have published new guidance on the processes and tools that can be used to achieve good design, and how to engage communities to ensure that developments reflect local views.
Full debate: National Design Guide
As the hon. Lady eloquently set out, it is now more important than ever that the Government and institutions such as the Treasury, which is at the heart of this debate, confront head on the question of how we continue to grow the economy while protecting our environment and tackling climate change with all the vigour and urgency that she and others would like. I believe that the two can and will be done together, and can be mutually beneficial.
The UK is a world leader in this area, but I appreciate that many people—me included—would like us to go further. Between 1990 and 2016, the UK reduced its greenhouse gas emissions by 42% while growing the economy by more than two thirds, demonstrating that environmental action need not come at the cost of economic prosperity.
The Government are determined to continue to build concern for the environment into our economic model. In a moment, I will explain some of the workstreams that we have already undertaken and where we could go further. We want to ensure that environmental policies are well considered and that the Treasury as an organisation is leading them, as I believe it is. The hon. Lady argued that it is time fundamentally to change economic models if we want to address the climate emergency. She questioned in particular whether GDP is a sensible measure of our economic wellbeing, so I will begin by addressing that.
In the time left, I will briefly mention a number of other steps that the Government have taken. The Treasury’s Green Book, our guidance on the appraisal and evaluation of infrastructure and other investments, is essential to a number of decisions that are made by the Government. In 2018, we refreshed the Green Book to include additional environmental values, such as greenhouse gases, air quality and noise pollution. We also included a social cost-benefit analysis, which I hope is making a significant difference. It will be very important in the upcoming spending review. That work is well perceived internationally. My right hon. Friend the Chancellor of the Exchequer has now convened international Finance Ministers, and the area that the UK will likely lead on internationally is that of economic modelling and how we can do that better on a global scale.
Full debate: Economic Growth and Environmental Limits
I do not agree with the hon. Gentleman, but the theme behind his remarks is one of the reasons why we have amended the Green Book. We have created this concept of social value, so we now take into account negative externalities to the environment and to people’s lifestyles as a result of greenhouse gas emissions, for example. I am happy to have a further conversation with him on that after the debate, as there is very little time left.
Following the report by the Committee on Climate Change, the Chancellor and I met Lord Deben and accepted his recommendation over the summer that the Treasury should do a major and urgent piece of work on how we can fund in a fair way the changes that we need to make as a society as a result of the Committee’s recommendations. That work is under way. I am very happy to meet the hon. Lady to give her more detail on some of those initiatives, which are extremely important. We want to take them forward with gusto in the months ahead.
Full debate: Economic Growth and Environmental Limits
We on the Government Benches are not complacent about climate change; we are leading the world in this area. We are decarbonising faster than any other G20 country and we are investing billions of pounds in this area. If we want to tackle the challenge of decarbonisation, we will need to gather the greatest amount of private investment and innovation from the private sector. We will never be able to do that by going around nationalising industries below market value and making bellicose statements that shareholders are lining their pockets. The shareholders are the savers, the pensioners and the international investors that this country needs to thrive.
Full debate: Fuel Duty Freeze
I thank the hon. Lady for that question, but that is not our experience. The investment that I have just described that is going into the sector is very considerable. Renewable capacity has quadrupled since 2010. Renewables’ share of electricity generation increased to 33% last year—a record high. The UK is decarbonising and we are meeting our climate change targets.
Full debate: Renewable Energy: Public Funding
The Government support investment using a range of tools, including stable, independent regulation, of which we have some of the best and most admired in the world—there are, of course, ways in which we can improve it. In the Budget, we commissioned the National Infrastructure Commission to consider how we can make our independent regulators more innovative, and improve the regulatory model without throwing it aside. We use contracts for difference in renewable energy, and the £40 billion Treasury UK guarantee scheme plays an important role. As we announced in the Budget, we are now reviewing our existing support for infrastructure finance, to ensure that as we leave the European Union we continue to guarantee that good projects in the UK receive the finance they deserve. We are also making a number of interventions to support new technologies, in which we believe the public and private sectors can work together, with the public investing to crowd in private sector investments. Two notable examples are a recent intervention on digital infrastructure, and also one on electric car charge points, in which the Government have invested £200 million. We believe that there is more scope for that in the future.
Full debate: Long-term Capital for Business
The hon. Member for Stalybridge and Hyde asked about the retrospective nature of the measures. They will be backdated to September 2016, and we estimate that the cost to the Exchequer will be £60 million over the next five years. We think that maximising economic recovery is important, and I believe it remains the Labour party’s position to support that. I think that that is right for the UK. It does not contradict our broader commitment to climate change and to meeting our targets for reducing carbon emissions.
We have done a full analysis of the impacts arising from this measure and found no evidence to support the suggestion that it will result in increased carbon emissions. The oil and gas industry is a very important part of our industrial strategy. It contributes to the diverse energy mix that our economy requires, but we remain absolutely committed to supporting a wide range of energy sources, including renewable energies. In the Budget and the Finance Bill that we have just legislated for are a range of interventions to support renewable energies and associated technologies, such as electric vehicles.
Full debate: Draft Investment Allowance and Cluster Area Allowance (Relevant Income: Tariff Receipts) Regulations 2018
Clause 63 makes changes to the definition of mineralogical processes in the climate change levy exemption for energy used in mineralogical and metallurgical processes, to ensure that the exemption remains operable following the UK’s departure from the EU. In response to representations, it also clarifies that tenants can benefit from the exemption where they are supplied with energy via a landlord.
Amendments 124 and 128 would require the Government to assess the impact of these changes on small and medium-sized enterprises, tenants, revenue, carbon budgets and greenhouse gas emissions reduction targets. Amendment 127 would require the Government to publish an annual statement listing the companies that have benefited from these changes.
Full debate: Finance (No. 3) Bill (Eighth sitting)
Clause 64 increases the standard and lower rates of landfill tax in line with inflation from April 2019, as announced in Budget 2017. Landfill tax has been immensely successful. Since its introduction, the amount of waste disposed of at landfill sites has fallen by more than 70%—of course, we would like to go further—and the benefits of that reduction are twofold. The first is to the economy: we have made better use of scarce resources rather than simply tipping them into holes in the ground across the country. Secondly, greenhouse gas emissions from decomposing waste are reduced. When waste is diverted from landfill, we promote more sustainable waste treatment, such as recycling. We are committed to moving towards a more circular economy, and we are working together with business, industry, civil society and the public to achieve that valuable aim. Landfill tax is an important fiscal lever that we can use to achieve it.
Full debate: Finance (No. 3) Bill (Eighth sitting)
It is good to be back, Mr Howarth. As we have heard, clause 57 will make changes to vehicle excise duty rates for cars, vans and motorcycles with effect from 1 April 2019. As announced in the Budget, those rates will increase in line with the retail prices index from that date. As a result, they will have remained unchanged in real terms since 2010, with additional significant incentives for ultra low and zero emission cars. That comes on top of the Government’s decision to freeze fuel duty rates for the ninth successive year, which by April 2020 will have saved the average car driver £1,000 compared with the pre-2010 escalator.
Cars first registered on or after March 2001 pay VED based on their carbon dioxide emissions; 87% of those cars will pay no more than £5 extra in 2019-20. From April 2017, a reformed VED system was introduced that strengthens the environmental incentives when cars are first purchased, with all cars paying a standard rate in subsequent years. The standard rate will increase by £5 only. Expensive cars with a list price of more than £40,000 pay an additional supplement for five years of paying the standard rate. That will increase from £310 to £320, so it is only a modest increase, and it will affect about 7% of new car purchases. Finally, the flat rate for vans will increase by £10, and for motorcyclists there will be no more than a £3 increase in rates. We believe that those are modest, incremental changes, which protect the public finances but also pay careful attention to the cost of living for motorists.
Full debate: Finance (No. 3) Bill (Seventh sitting)
I thank the hon. Gentleman for those questions. I hope that I can answer them all and reassure him. Clause 58, as we have heard, makes changes to ensure that purpose-built taxis that are capable of zero emissions do not have to pay the VED supplement applicable to expensive vehicles, which are those with a list price of more than £40,000. Having listened to representations on the issue, the Government announced in March that the exemption for such taxis would be brought forward a year earlier than planned.
An exemption will encourage the transition to ultra-low and zero-emissions taxis. The figures show that, certainly in London, there has already been a significant take-up in vehicles, although it is less in other parts of the United Kingdom. I believe that the manufacturers are now targeting other cities, including Manchester and Nottingham—my nearest city—to improve their air quality. We want to see that rolled out as soon as possible in all part of the United Kingdom.
In passing, the hon. Gentleman mentioned other private hire vehicles. Our argument—a valid one, I think —has always been that there are a range of other options available to drivers of private hire vehicles. They do not have to purchase a vehicle costing over £40,000. That would be a choice because they want to enter a particular segment of the market. Those driving a registered London taxi do not have that discretion. Therefore, it would not be right for drivers buying a taxi capable of zero emissions to pay the VED supplement targeted at cars at the luxury end of the market. As the supplement is only due from the second licence onwards, this means that almost all taxi drivers who have purchased an eligible taxi from April 2018 will never have to pay the supplement. This will save those drivers up to £1,600 in total.
The changes made by the clause will provide the power to exempt purpose-built zero-emissions taxis from the supplement for expensive cars, through regulations. This will enable the Government to apply the exemption to further models as they become available in the future.
I will turn briefly to the amendments tabled by the hon. Member for Norwich South. Amendment 112 would require the Government to review the revenue effects of the changes made by the clause. The Government have already published a tax information impact note, in line with normal practice, which sets out that the revenue impact of the changes will be negligible. Amendments 113 and 114 would require the Government to review the effect of the clause on the taxi and private hire sectors, and the impact on carbon dioxide emissions and our carbon budgets. The measure applies to purpose-built taxis only, enabling a quicker switch to greener models by saving drivers that £1,600. It is not expected to have an impact on the number of taxis on the roads, but it is intended to increase the proportion of those that are capable of zero emissions. By strengthening the incentive to purchase such taxis over conventionally fuelled alternatives, the measure is expected to have a small positive impact on our ability to meet our fourth and fifth carbon budgets, although isolating its impact would be challenging and uncertain. I am not sure what value, if any, that analysis would provide. Again, these impacts were covered in the published tax information and impact note. I respectfully urge the Committee to reject the amendments, on the grounds that they are unnecessary.
Full debate: Finance (No. 3) Bill (Seventh sitting)
The hon. Member for Aberdeen North made a valid point about the European standards. It is our intention to remain closely aligned to those. That seems sensible and it is our intention in a number of respects, such as climate change, emissions and carbon budgets, as is indeed set out elsewhere in the Bill. For example, we have not yet made a final decision on carbon trading, but we shall monitor it and review the matter. If I can give the hon. Lady any further information I will write to her to set out the position of the Department for Transport.
On the broader question of why we are not using the VED system for HGVs to encourage greater take-up of zero-emission or ultra-low emission HGVs, it comes back to the point made by the hon. Lady: currently there are very few commercially available ultra-low emission alternatives for HGV drivers, which prevents the broad uptake of new vehicles. Clearly, we would like to do all we can to stimulate the market and see rapid progress, but we have to be mindful of that. Through the Road to Zero strategy that was published earlier this year, the Government have committed to working with the industry to reduce HGV greenhouse gas emissions significantly by 2025. The strategy sets out the Government’s plans to use a variety of different tools to meet that commitment.
Full debate: Finance (No. 3) Bill (Seventh sitting)
The Government remain committed to increasing environmental efficiency, and the savings from ending first-year allowances and tax credits will be used to fund the industrial energy transformation fund. That fund will help businesses with high energy use to cut their energy bills and reduce their carbon emissions, by supporting investment in energy efficiency and other innovative decarbonisation technologies that may become available in the years ahead. Those could include, for example, investment in carbon capture and storage, or fuel-switching technologies. However, decisions on the scheme design, including eligibility and the technologies that will be supported, will be subject to the consultation with industry that I have just described. Establishing the scheme will fulfil our manifesto commitment to establish an energy efficiency scheme for industry, and that has been widely welcomed, including by groups such as EEF, the manufacturers’ organisation; UK Steel and the Energy Intensive Users Group. Since the Budget, I have spoken to a number of heavy users of energy, including car manufacturers, who all welcome this measure.
Full debate: Finance (No. 3) Bill (Fifth sitting)
The Climate Change Act 2008 provides a world-leading governance framework that ensures that progress towards carbon targets is robustly monitored and reported to Parliament. First, the Government are required to prepare and lay before Parliament an annual statement of emissions that sets out the total greenhouse gases emitted to and removed from the atmosphere across the UK, and the steps taken to calculate the net UK carbon account. Secondly, the independent Committee on Climate Change is required to prepare and lay before Parliament an annual report, to which the Government are required to respond, on the Government’s progress towards meeting the UK’s carbon budgets. I would expect the committee to take the changes made by clause 32 into account in their deliberations. Thirdly, the Government are required to prepare and lay before Parliament a statement that sets out performance against each carbon budget period and the 2050 target.
Full debate: Finance (No. 3) Bill (Fifth sitting)
The IPCC will report in the usual way. It will not necessarily update its methodology, but it will lay before Parliament its usual statement and the Government will have to respond, as they have in every case. The Committee on Climate Change will hold the Government to account for the changes that we make, such as the ones in the Bill. That does not entirely answer the hon. Gentleman’s question on future targets. The mechanisms in place are strong and will ensure monitoring and reporting to Parliament of greenhouse gas emissions and of the Government’s responses. I therefore urge Members to reject amendment 77.
Full debate: Finance (No. 3) Bill (Fifth sitting)
After that excellent start, I will continue. Clause 33 extends the life of the first-year allowances for electric vehicle charge points until April 2023. In the UK, the continued use of high-emission vehicles creates pollution and increases health issues. This measure was first introduced on 23 November 2016 to support the transition in the UK to cleaner vehicles with zero or ultra-low emissions. The measure allows businesses that invest in charge points to reduce their taxable profits by 100% of the cost of their investment in the year it is made. That provides accelerated tax relief compared with normal capital allowances, and so encourages greater investment in these assets. The allowance is currently due to expire in April 2019. The clause enables the first-year allowance to continue as part of the Government’s ambition for all new cars and vans to be zero emission by 2040.
Full debate: Finance (No. 3) Bill (Fifth sitting)
The best way to get new investment into our industry is, as I described, to protect jobs and maximise the economic recovery, and we believe that we have reached that point with this measure. The Government take their environmental responsibilities seriously, as we described when debating the previous clause. We have legally binding commitments to reduce greenhouse gas emissions under the Climate Change Act 2008 and the system of carbon budgets it sets out, as well as the Paris agreement that we ratified in November 2016. Nothing in this measure takes away from our efforts elsewhere, but we want the UK oil and gas industry to continue to thrive. It has been through a difficult period following a significant reduction in the price of oil, and that price has fallen once more since the Budget. That industry makes an important contribution to the UK economy, supports more than 280,000 jobs, and provides around half our primary energy needs. To date, it has paid around £330 billion in production taxes. By introducing these changes for late-life oil and gas assets, we hope to encourage new investment in the UK continental shelf, and I commend the clause to the House.
Full debate: Finance (No. 3) Bill (Fifth sitting)
Let me turn first to clauses 68 to 78 with respect to the carbon emissions tax. These clauses will take effect only if the UK leaves the European Union in 2019 without a deal. The clauses will give the Government the power to introduce a no-deal carbon emissions tax. The rate for 2019 would be set at £16 per tonne of carbon dioxide equivalent, and the tax would cover the same electricity generators and industrial businesses that currently participate in the EU ETS. The tax would provide the same protections against carbon leakage as the EU ETS. Operators would pay the tax only on emissions of carbon dioxide and other greenhouse gases emitted above an allowance set for each installation in advance of the tax year. This is in line with the EU ETS system of free emissions allowances.
In effect, the carbon emissions tax would seek initially to replicate the effects of the EU ETS as closely as possible, in the event of no agreement. This is important, as I hope hon. Members in all parts of the House will agree, for two reasons: first, because we want to provide certainty for businesses and for the energy industry to enable them to make investment and business decisions with confidence, as the industry has asked us to do; and secondly, because maintaining a carbon price is a key component of meeting our legally binding climate change commitments.
Full debate: Finance (No. 3) Bill
Clause 90 is about preparatory expenditure. Alongside preparing for no deal, the Government are developing long-term alternatives to the EU emissions trading scheme. As set out already in the outline political declaration on the future relationship between the EU and the UK, we are considering options for co-operation on carbon pricing, including, if possible, linking a UK national greenhouse gas emissions trading system with the EU ETS. Clause 90 will allow Departments to begin preparatory expenditure on a UK ETS, which is included in the Bill, to prepare for a linked or unlinked domestic trading scheme. It does not mean, as I said earlier, that a final decision has been made as to which option to implement, but it does ensure that all the options are kept open and we can proceed with the kind of planning that one would expect.
New clause 17 would require the Chancellor to review the carbon emissions tax to determine its effect on the UK carbon price and the UK’s ability to comply with its fourth and fifth carbon budgets. We are confident that the carbon emissions tax would be similarly effective to the EU ETS, and I can assure Members that there are already robust requirements to report on progress towards the UK’s emissions reductions targets. For example, the Climate Change Act 2008 provides a world-leading governance framework that we certainly support. First, it ensures that the Government are required to prepare and lay before Parliament an annual statement of emissions, setting out the total amount of greenhouse gases emitted to, and removed from, the atmosphere across the UK and the steps taken to calculate the net UK carbon accounts. Secondly, the independent Committee on Climate Change is required to prepare and lay before Parliament an annual report on the Government’s progress towards meeting the UK’s carbon budgets, which the Government are required to respond to. Thirdly, the Government are required to prepare and lay before Parliament a statement setting out performance against each carbon budget period and the 2050 target. We believe that, taken together, these are strong existing mechanisms, which are respected and understood, to ensure that we monitor and report to Parliament on greenhouse gas emissions. I therefore urge hon. Members to reject new clause 17.
Full debate: Finance (No. 3) Bill
The hon. Member for Wakefield (Mary Creagh), at the beginning of the debate, and other hon. Members later, asked what action we are taking to support the environment and on climate change. One such measure, of course, is our proposed plastics packaging tax—again, leading the world by creating an innovative tax that encourages the producers of plastic packaging to take responsibility and change their packaging, and building on great Conservative environmental taxes of the past, such as the landfill tax created by my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke).
Full debate: Finance (No. 3) Bill
The hon. Member for Oxford East (Anneliese Dodds) raised a point about the OBR’s remit with regard to the environment. The Government are interested in how we can ensure that the Treasury takes account of climate change and other important factors. One example of our action is commissioning Professor Dieter Helm to carry out an important review for us and to take forward the idea, still in its infancy, of how we as a country could create natural capital accounts. We are very keen to work that through in the coming years.
Full debate: Office for Budget Responsibility
Lastly, it is very important to take seriously the need to reduce energy costs for manufacturing and other parts of our economy. It is of course important to produce a sustainable energy economy and ecosystem, but we are pricing out many of our most important manufacturing businesses with expensive energy projects. I am particularly concerned about some of the Government’s decisions in recent years that have produced extremely expensive projects, for which we will have to pay for years to come. It was imprudent of us to have closed some of our power stations, such as Cottam in my constituency, which were operating perfectly well and helping to keep energy costs down for consumers and businesses.
Full debate: The Government’s Productivity Plan