Carbon Budget Delivery Plan

Wednesday 12th November 2025 Westminster Hall

16:30

[Abtisam Mohamed (Sheffield Central) (Lab)]

I beg to move,

That this House has considered progress on the Carbon Budget Delivery Plan.

It is a pleasure to serve under your chairmanship, Sir John. This week marks the start of COP30 in Brazil, a moment when world leaders, scientists and campaigners come together, united in purpose, to confront the climate crisis head-on. Last week, the World Meteorological Organisation delivered another sobering warning that 2025 is likely to be the second or third warmest year on record. With every passing year, we see the growing cost of inaction—wildfires, floods, droughts and communities displaced across the world. The message is clear: we need bold action, and we need it now.

Since 2022, environmental charities and organisations have fought every step of the way to ensure that we have a competent and detailed carbon budget delivery plan. The last Government’s plan—if we can call it that—ignored expert warnings and was twice ruled unlawful by the High Court. The Climate Change Committee said last year that, under the previous Government, the UK net zero ambitions were “off track”. Thankfully, we are no longer in that chaotic place; this year at COP30, the UK delegation is carrying the message that climate action is not a burden but our route to a future, with stronger communities and a safer planet.

We know that without decisive action, bills will continue to rise, businesses will struggle, and the environment we all cherish, from the peaks to the coast, will be lost. We must be clear, credible and ambitious in our plans to decarbonise. It is how we will not only create high-paying clean energy jobs but cut households energy bills and invest to secure our future. The plan published by the Government at the end of October is a start, and it provides welcome clarity, but is it ambitious enough? In my constituency of Sheffield Central, people understand how urgent this is. They want action. They want the Government to commit to protecting our planet and making life more affordable.

It is disappointing that Sheffield will continue to be the only major UK city without electrified rail. Over the past year, when I have met Sheffield Friends of the Earth and our local Greenpeace group, they have shared my view that we must go much further, and we must work at a faster speed. I look to the Minister to provide answers to locals, who have now missed out on electrification, as well as newer, faster and cleaner trains in the region.

The cost of energy also remains one of the biggest worries for people in my constituency. Time and again, I hear from residents who are doing everything they can to make ends meet, yet their energy bills are still far too high, and they continue to rise. Too many families have been forced to make impossible choices between heating their homes and putting food on the table. That is why, alongside Power for People, I have pushed for a fundamental reset of how we generate and buy energy locally.

Clean, locally sourced and locally stored power relieves pressures on the grid, and granting local supply rights for community energy schemes is a common sense approach. It makes no sense for the cost of regulatory approval to remain so high that locally sourced energy must be sold back to the central grid, instead of being supplied locally. Can the Minister expand on how the Government will build domestic supply chains for clean energy? How will they create jobs and bring investment back into our communities?

It is also true that far too many of our homes, especially older homes, leak heat through poor insulation measures. That is why the warm homes plan is incredibly important. Investment is necessary for households to install solar panels, heat pumps, batteries and insulation. These measures will, in the long term, cut bills, reduce emissions and tackle fuel poverty for good. However, simply offering these retrofit programmes will not be enough; people must know about them and have confidence in them.

That is why it is so important to have places like the Sheffield Energy Hub, where fuel poverty charities regularly offer advice to people on energy efficiency, energy saving and the links between cold homes and unhealthy futures. Despite the expectation, the wider warm homes plan has not yet been published, and speculation that the upcoming Budget will remove green levies, which pay for home energy efficiency measures, is deeply worrying.

[Richard Foord (Honiton and Sidmouth) (LD)]

The Climate Change Committee’s top recommendation was that the Government’s climate plan ought to remove policy costs from electricity bills. Does the hon. Lady think that the Government could seek to address that in the Budget?

[Abtisam Mohamed]

The Government should consider how consumers’ bills can be reduced. I want to see the warm homes plan feature, and I want it published so that we can have appropriate conversations about what is in it. If the cut to investment without guaranteed funding from elsewhere goes ahead, billions of pounds and over 100,000 jobs in the installation industry would be at risk. I urge the Minister to outline how the Government will end that uncertainty, bring the warm homes plan forward quickly and start the consultation so that experts and communities can help shape what is in it.

Improving energy efficiency is one of the quickest ways to lower bills, but it must go hand in hand with a bold push for renewable energy. We know that solar and onshore wind are now the cheapest and cleanest sources of power available. If we invest in them at scale, we can bring down energy costs for households and businesses alike, while strengthening our energy security and cutting carbon at the same time. That is why I have raised concerns about the extraction of the Rosebank oilfield. When I met Sheffield Rosebank campaigners, they knew, as I do, that extraction of the oilfield will not reduce gas prices, but it will have a significant effect on the climate. Today the developer’s impact assessment shows that extraction would release nearly 50 times more gas than originally cited.

At a time when the focus should be on clean, affordable and home-grown energy, approving one of the largest new oilfields in the North sea sends the wrong message. It risks locking us into decades of expensive, polluting fossil fuels, while doing little to reduce bills here at home. We should instead be putting that same investment and ambition into home-grown renewables, energy efficiency and a fair transition for workers and communities, building the kind of fair sustainable energy future that people in Sheffield and across the country want to see.

This is not just about homes; it is about jobs, growth and opportunity. Clean energy industries have the potential to provide high-skilled, well-paid jobs across the country, driving economic growth while tackling the climate crisis. The green economy has grown at three times the rate of the rest of the economy, yet in Sheffield, I have met businesses that have struggled with soaring energy costs, threatening their future and their workers’ livelihoods. A clear, fully consulted strategy is needed to ensure that support reaches the businesses that need it the most, as well as driving a greener and fairer economy. What are the plans to support small businesses struggling with their higher energy bills?

At the University of Sheffield, world-leading researchers are pioneering advances in sustainable aviation, developing cleaner fuels, lighter materials and cutting-edge technologies to help decarbonise. Through the university’s Energy Institute and Sustainable Aviation Fuels Innovation Centre, Sheffield is proving that climate action can go hand in hand with innovation, job creation and global leadership in the industries of the future. Although I welcome the current plan, I want to push the Government further, because it is vital that we lead by example on the global stage.

Many of my constituents worry about the overreliance on fossil fuels and the impact big polluters have on our environment. We know how disastrous it will be if large corporations continue to go unchecked in relation to their carbon emissions and pollution. That is why I have joined the Make Polluters Pay campaign, and why I am urging the Government to go further by introducing polluter pays measures such as a frequent flyer levy to curb the most polluting activities and fund green investment. COP30 has provided a unique opportunity for the UK to join France, Spain and others in the Premium Flyers Solidarity Coalition, which is committed to raising international climate finance by increasing levies on premium flyers including business class, first class and private jet users.

[John Milne (Horsham) (LD)]

It is estimated that we would have to plant a forest twice the size of Greater London to cancel out all the extra emissions created by the expansions of Heathrow, Luton and Gatwick, next to my constituency of Horsham. Does the hon. Member think that that suggests the Government are entirely serious about meeting our carbon budget?

[Abtisam Mohamed]

There is a recognition that we need to do more on our climate priorities and on addressing increased aviation. We definitely need to explore that, and I will press the Minister on it in the future.

The revenue raised could be used to support domestic priorities, including insulating homes and building clean energy, and provide international climate finance to help the most vulnerable communities around the world adapt to the devastating effects of climate change. By ensuring that those with the largest carbon footprints contribute the largest share, we can show that tackling the climate crisis can be done fairly without punishing those who are worse off.

As the world meets in Belém to chart a path for the planet’s future, the UK can once again lead by example. We must act with purpose, ambition and hope. We must protect our planet, cut bills and create jobs while restoring Britain’s leadership on the world stage. Tackling the climate crisis is not just about saving the planet; it is about building a better, fairer and more secure future for everyone.

Will the Minister address my questions to him today? Will he provide a timeline for when the warm homes plan will be published? Does he have an update on the midland main line upgrade, and on when Sheffield can expect that critical investment to resume? Will he expand on how his Department will build resilience into clean energy supply chains, create jobs and investment in Sheffield, and ensure that energy sourced locally can be bought locally? Will he confirm what support is being offered to small businesses struggling with higher energy bills? Will he outline the Government’s commitment to boost the green economy and fund research at Sheffield’s world-leading institutions? Finally, will he commit to ending Britain’s reliance on fossil fuel giants, and ensure that they pay their fair share in tackling the climate crisis?

[Several hon. Members rose—]

[Sir John Hayes (in the Chair)]

Order. I see that quite a lot of people want to speak. I will not set a time limit, but if you can be disciplined in how long your contributions last, that would be very helpful.

16:42

[Dr Ellie Chowns (North Herefordshire) (Green)]

It is a real pleasure to speak in this debate, and I am very grateful to the hon. Member for Sheffield Central (Abtisam Mohamed) for securing it. To be honest, I am a bit disappointed that the Secretary of State did not come to the House to make a statement about the carbon budget delivery plan, especially given that the previous one was in breach of the Climate Change Act 2008, and given the urgency of the UK’s meeting not just its statutory domestic climate targets but its international obligations under the Paris climate agreement.

It is obvious that UK climate action has important domestic and international ramifications. We are holding this debate while COP30 takes place. The UN has warned that the goal of a 1.5°C limit is fragile. According to the UN Secretary-General, the current plans put forward by nation states to cut emissions will put the world on a pathway to 2.3°C of global warming if they are fully implemented, and yet the UK’s new carbon budget delivery plan will fall short of our own commitments under the COP process, via our nationally determined contributions. The delivery plan is looking to achieve 96% of the cuts for the 2030 NDC and 99% for the 2035 NDC. That does not even reflect the fact that the UK’s NDC commitments themselves fail to take account of the scale of ambition needed to tackle the burning reality of the climate crisis, in line with what the climate science demands, and to reflect the UK’s historic responsibilities—and therefore moral obligation—to take a fairer share of the global need to cut emissions.

The Government’s carbon budget delivery plan is absolutely better than previous versions—let’s face it, it was a low baseline—but it is still wanting, both in global terms and in terms of facing the climate reality. That needs to change; even more ambition is required.

The hon. Member for Sheffield Central talked about the warm homes plan and the wider need for investment, particularly in the housing sector. We must ensure all our homes are fully fit for the future. As she said, it must be recognised across Government that climate action is absolutely central. It is not just about tackling our carbon emissions; it is also a really important way to tackle inequality and generate a resilient, jobs-rich economy that will secure long-term prosperity for us all.

There are of course things to welcome in the carbon budget delivery plan, including tougher energy standards for the private rented and social rented sectors, welcome signals on heat pumps and so on, but to make our homes really fit for the future we need to think even bigger. We need to minimise embodied carbon in the housing sector, and maximise on-site energy generation, biodiversity in the construction of new homes and resilience in things such as flooding and overheating, which is crucial in tackling the impacts of the climate crisis, which is hitting harder and harder. Every new home—especially every new social home—must be built to the highest standards.

We urgently need the warm homes plan. It is deeply concerning that there are rumours that the Government are seeking to rob Peter to pay Paul by taking money away from the warm homes plan—that crucial long-term investment in insulating our homes and making them fit for the future so that people have cheaper bills. We must not put a short-term sticking plaster on bills. We need both, not one or the other—[Interruption.]

[Sir John Hayes (in the Chair)]

Order. There is a Division in the House. We will suspend for 15 minutes, and when we return Ellie will draw her speech to its conclusion reasonably speedily.

16:45

Sitting suspended for a Division in the House.

17:00

On resuming—

[Dr Chowns]

I will conclude with three brief points. First, reframing the carbon budget delivery plan as a growth plan takes things in the wrong direction. It is the myth of infinite growth on a finite planet that got us into this mess in the first place, and that is driving the climate and nature crisis. This moment demands climate action that is rooted in tackling inequality, not feeding the pockets of developers and big oil bosses.

That brings me to my next point. The science on fossil fuels is unequivocal. In addition to the positive measures in the carbon budget delivery plan, we have to keep fossil fuels in the ground. Rosebank and Jackdaw cannot—must not—go ahead.

My final point is to put on record my thanks to Friends of the Earth for challenging the last plan in court and for its ongoing commitment to holding Governments to account. All this is possible only because of the Climate Change Act 2008. We all have a responsibility to uphold that incredibly important piece of legislation, which is key to ensuring that together we build a sustainable future for our country.

The British public remain very supportive of ambitious climate action. They want to know that measures are being taken to transition the economy, build a sustainable future and tackle the huge risks of climate breakdown. We all have a responsibility to ensure that that future is liveable for ourselves and future generations. I look forward to continuing to work across parties to build that positive future.

[Several hon. Members rose—]

[Sir John Hayes (in the Chair)]

About six people want to contribute, so they each have about four minutes. I will not make it formal, but I know I can rely on you not to let me down.

17:00

[Barry Gardiner (Brent West) (Lab)]

I congratulate my hon. Friend the Member for Sheffield Central (Abtisam Mohamed) on securing the debate and introducing it in the way she did.

To misquote Bill Clinton, “It’s a limit, not a target, stupid!” The carbon budgets we set represent a threshold we should not breach, not a target we should aim for or just dip under. We are having this debate now because our courts ruled that the original carbon budget delivery plan was unlawful; it lacked credible plans to meet our obligations.

Published just two days before the legal deadline, the Government’s new plan states that they have sufficient policies to achieve their sixth carbon budget, which required a 77% reduction in emissions from the 1990 baseline. So, do they? Remember that carbon budget 6 is the first to include international aviation and shipping. The plan highlights where decarbonisation will be the hardest, and shows us those sectors that need to be prioritised if we are to achieve a totally clean, secure and affordable energy system by 2050. Our homes and buildings’ operational and embodied carbon need to be addressed, and our heavy industries, such as steel, glass and ceramics, need to find high-energy, low-cost solutions. The aviation sector must show how it can meet the Government’s expansion expectations without an over-optimistic reliance on the production of sustainable aviation fuel or a dependence on greenhouse gas removal technologies that are still not proven at commercial scale.

First, let us examine the energy and emissions projections that undergird the plan. The emissions projections include all planned, adopted, implemented and expired climate change policies. They are expected to deliver more than 100% of the emissions reductions to meet carbon budgets 4 and 5, but are projected to contribute only 76% of the savings needed for carbon budget 6. Over the summer, the Climate Change Committee examined 163 of those plans for reducing emissions. Fewer than half were considered to be fully credible, and more than a third were considered to be insufficient or to have significant risk of failure. On its top recommendation—to make electricity cheaper—the committee said that it had “not…seen any progress” in the past year.

It is good that the plans are improving and becoming more credible year on year, but the delivery plan states only that the Government “expect” the energy and emissions projections to deliver the requisite emissions reductions. It does not say that they are confident or give a percentage of probability, as we find in the reports of the Intergovernmental Panel on Climate Change. The excellent people at Carbon Brief note that by counting all the various policies—past, present and future—alongside other modelling adjustments, the baseline for carbon budget 6 is already reduced by 46.1 million tonnes of carbon dioxide equivalent.

The policies assume the success of the zero emission vehicle mandate and the SAF mandate—policies that are still very much in the pipeline. The SAF mandate Bill is still only on Second Reading in the House of Lords. The first warning I give, then, is that the first tranche of policies—at table 3 in the plan—cannot be taken as a given, even though they have been incorporated into the lowering of the baseline for how we measure CB6.

Warning No. 2 concerns what the plan terms “wider factors”. That principally means the adoption of technologies, such as artificial intelligence, that are likely to improve energy efficiency, help integrate renewable energy generation and support sustainable practices, according to the technical annexe. The Government’s analysis finds that those wider factors, which also include consumer behaviour, could reduce emissions by an average of 20 megatonnes of CO₂ equivalent a year over the period of CB6, from 2033 to 2037. The annexe admits that there is

“the potential for not all of these reductions to be realised”,

before saying that it “reflects a cautious approach”. I will await the CCC’s full assessment of whether these wider savings are realistic in its 2026 progress report.

The Environmental Audit Committee has recently published its report on warning No. 3, aviation. The final hearing of our inquiry was told that demand management would not be one of the measures to reduce emissions in the sector. Shockingly, that was despite the fact that in its advice on carbon budget 7, the Climate Change Committee said that demand management should account for 54% of emissions reductions in the sector by 2040. SAF only accounted for 33%, and efficiency improvements of technology were a paltry 13%.

The Department for Transport says that aviation can be fossil fuel-free by 2050 without demand management. Will the Minister ensure that the Government publish that unlikely analysis so that we can properly examine it? I am in no doubt that the Climate Change Committee will be keen to do so. I note that the committee clearly states that

“the aviation industry adopting the cost of aviation decarbonisation will help manage demand”.

Both the CCC and the recently published Whitehead review are very clear that the aviation sector must pay for the carbon that it pollutes in accordance with the polluter-pays principle.

The Whitehead review recommends that the sector should be required to pay for the greenhouse gas removals it needs to reach net zero, and that Government should ensure that they do so. A fossil-free sector will drive competition between SAF technologies and the new greenhouse gas removal technologies, which is a good thing and to be welcomed, but getting those technologies up and running with far greater urgency is an imperative, given the Government’s desire to go ahead with airport expansion. I remain sceptical at best about the Government’s approach to aviation, and it surely has to be seen as one of the biggest potential pitfalls in their net zero plans, relying so heavily as they do on technology that is not currently readily available.

The fourth warning is one voiced by many climate scientists, such as Kevin Anderson, professor of energy and climate change at the University of Manchester. It is that the Climate Change Committee appears to have changed its mandate from advising Government on what they must do to meet the scientific realities, to advising the Government only what they consider the Government will find politically acceptable and be willing to accept.

I have been a champion of the Climate Change Committee. I believe its independence and forthright advice have been why we managed to achieve such enormous bipartisan progress in tackling climate change. I commend the previous Conservative Government on all the progress they made on that, and I think we need to restore that bipartisanship. However, Professor Anderson rightly warns:

“Major societal transformations, such as moving from private car to public transport, are largely absent from the CCC’s recommendations.”

Instead, the CCC proposes that the UK should capture and store 36 megatonnes of CO₂ annually by 2050, triple the current rate of the entire planet—I will say that again: triple the current rate of the entire planet—to avoid making that recommendation to a modal shift from private vehicles to public transport. That smacks to me of the committee dodging the tough advice where it thinks the Government might find it politically unwelcome.

My advice to the committee is to grow a pair. Over-optimistic reliance on future technofixes is not a solid policy basis to achieve the carbon budgets and reductions that we have set. The projection for carbon budget 6 is that we will be just 2 megatonnes within the 965-megatonne limit for that period. That takes me right back to where I started: these budgets are not targets to scrape under as narrowly as possible while trying to change as little about our way of life as we can. We did not carry on as normal during the covid pandemic, just waiting for the vaccine to come and save us. Instead, we acted urgently to fundamentally change the way we operated to protect the most vulnerable.

If we carry on as normal, seeking to do just about enough, we risk overshooting our carbon budgets. In doing so, we fail future generations, and we fail those in the global majority for whom the planet has already warmed too much—whose crops are failing through drought, whose homes are already under floodwater, and whose forests are already burning. Let us all be clear; the costs of inaction on climate change are far greater than the costs of action. That is why the carbon budgets are so important. It is all our responsibility to ensure that we have adequate policies in place to deliver them.

[Several hon. Members rose—]

[Sir John Hayes (in the Chair)]

Order. I said four minutes a speech. This is partly a debate about targets and figures, Barry, and the difference between four and nine is five.

17:10

[Dr Roz Savage (South Cotswolds) (LD)]

It is a pleasure to serve under your chairmanship, Sir John. I thank the hon. Member for Sheffield Central (Abtisam Mohamed) for securing this debate. I welcome the publication of this plan; on paper, it marks an important step in bringing our climate ambitions into alignment with our responsibilities to nature and to people. I particularly welcome the recognition that the climate and nature crises are inseparable. The introduction of an annual climate and nature statement to Parliament is a significant development, and I am proud that it grew from the Climate and Nature Bill, which I introduced earlier this year.

First, we must ensure that this plan truly treats climate and nature as partners, not as parallel workstreams. The commitments to restore peatland, create woodland, clean up air and water and reduce flood risk are essential, yet the scaling back of targets for tree planting and peat restoration is concerning. Ambition of language is not yet matched by ambition of action. We must move beyond a narrow focus on trees towards a whole-ecosystem approach, valuing soils, wetlands, hedgerows and biodiversity as carbon sinks and habitats. I am concerned by the heavy reliance on carbon capture and storage and sustainable aviation fuels. Speculation on technology that is still in development risks delaying real emissions reductions and offshoring ecological harm. We cannot afford to chase technical fixes at the expense of nature, when nature itself can be our greatest ally in the fight against climate change.

Secondly, the green transition must be fair and rooted in our local communities. The green economy can deliver cheaper bills, warmer homes and thousands of good jobs, but this will work only if we support the people who are already trying to drive change. Our farmers, local councils, schools and families want to be part of this transition, but they must be incentivised, not penalised. At the moment, farming emissions remain high, while clarity for farmers remains low. I know that my farmers in the South Cotswolds want to be part of a fair transition, but they need clarity on where the goalposts stand. There is no coherent strategy to boost domestic horticulture and arable production or to ensure that family farms are not squeezed out by intensification. A thriving green economy cannot come at the cost of hollowing out our countryside.

Community energy is another clear opportunity. Demand for community-run renewables far exceeds the support currently offered. Unlocking the right for community groups to sell energy directly to local people would be transformative and enable communities to truly participate in their own energy transition. I am troubled that huge ground-mounted solar projects, such as the one planned for my constituency, risk alienating the public, rather than including them. We need a just and fair energy transition that is as resilient to adverse conditions in the geophysical climate as potential future political climates. When this transition is deeply rooted in communities, it cannot be uprooted by a net zero-sceptic Government in the future. I welcome this plan, but we must ensure that it truly delivers from the ground up, not the top down. Let us empower farmers, communities, councils and schools to lead the way. Let us build a resilient, vibrant and nature-rich future that truly works for everyone. As Christiana Figueres has said:

“Doing our best is no longer enough. We must all now do what is necessary.”

17:14

[Tom Hayes (Bournemouth East) (Lab)]

It is a pleasure to see another Hayes serving in the Chair, Sir John. I thank my hon. Friend the Member for Sheffield Central (Abtisam Mohamed) for securing this debate. When we talk about the carbon budget delivery plan, we are talking about progress towards a cleaner, fairer and more secure Britain. With COP30 getting under way properly, we know the consequences of breaching the 1.5° limit: there will be more people exposed to extreme heat, higher sea levels, increased food security risks, the extinction of species, a loss of virtually all coral reefs, and the spread of climate-sensitive diseases on a greater scale. We cannot allow that to happen.

Although we are tackling this issue for global reasons, it is clear that there will be benefits at home. Clean energy is the route to faster and more resilient growth. Analysis by Oxford Economics for Energy UK shows that we can add up to £240 billion in value to our economy by 2050 if we increase our ambition. The faster we move now, the more our economy will work for working people and the more good, secure jobs we will create.

I am particularly pleased that the Government are setting up Great British Energy with £8.3 billion of funding going into large-scale solar, offshore wind and grid-scale battery projects. I am also pleased to see today’s announcement by SSE of £33 billion of investment to unlock secure and affordable clean energy, and to support our economic growth. That is proof that when we invest in the green economy, we see investors returning that.

Sprinting to net zero does not just boost growth; it also protects growth. We saw what happened when the last Government failed to plan for resilience. Volatile international fossil fuel markets sent our bills soaring and made our growth sputter. Typical household energy costs nearly doubled in a single year and all our constituents are still living with the cost of that. Millions of people were pushed into fuel poverty and energy bill debt remains at record levels. Indeed, when the last Government finally acted, they did so at huge cost, spending £94 billion of taxpayers’ money. That crisis could have been prevented with sustained investment in energy independence and efficiency.

We should be going as fast as we can on net zero because another such crisis could be prevented with clean home-grown energy. The Office for Budget Responsibility has warned that a fossil fuel price shock could cost us between 2% and 3% of GDP in the 2030s. We cannot afford such a shock to be inflicted on our constituents all over again.

The delivery plan faces several other challenges. We know that there are opponents who have chosen an anti-jobs, anti-science path that would spell disaster for our economy, our security and our planet. Too often, net zero has been treated as a political football. Deadlines have been delayed, targets have been softened and certain voices have claimed that our targets are “impossible” to meet. Indeed, there have even been threats to rip up green contracts, undermining investor confidence when our constituencies need investment in jobs in the green economy so that we can lead from the front. To all those who resist home-grown renewables or reject British-built nuclear, let me be clear: they are undermining our security, driving up our bills and holding back growth. That is bad for Britain and bad for our planet.

Our national security is our energy security, so I do have to speculate about some of the opposition to net zero. When I see that 92% of Reform UK’s post-2019 funding is linked to or comes directly from donors tied to fossil fuel interests, polluting industries or climate science denial groups, it makes me wonder. Similarly, we know that the leadership of Reform UK’s pick for First Minister of Wales was a paid Putin propagandist. Why is Reform UK so keen for Britain to be addicted to Russian-dominated fossil fuel markets? Our energy security comes in many forms.

We also know that despite all the political noise, the markets and the public remain firmly committed to clean energy. Among Fortune Global 500 companies, net zero commitments have risen from 8% in 2020 to 45% last year. Some 70% of the UK public support the net zero target, compared with just 18% who do not, and 65% of the UK public want more renewable generation, while only 7% disagree with increasing renewables. Polling by the UK Sustainable Investment and Finance Association found that 68% of people are uncomfortable with their pensions or savings being invested in companies that harm the environment.

Let me be clear: the Conservatives and Reform UK will lock Britain out of the race for green economic leadership. People up and down our country will lose out. However, Britain can no longer be held back, because the race for the jobs and industries of the future is speeding up, so we must go all-in on clean energy.

This is a critical moment. Global insecurity is driving insecurity at home, and many people feel ignored and left behind. While the world moves at speed, our politics remains stuck. People are hungry for change, but if this Government do not deliver it, others will—and that worries me.

Our task as a country is to lead in this era. It is not to defend the broken ways of doing things, but to create new methods to give people the stability and pride that they crave, and a country that is on the up once again as it leads the global race for green investment. We cannot afford to leave our country to those who will cosy up to Putin by indulging the fossil fuel markets and volatile prices that come with them. That means taking on vested interests, and restoring control of our energy and our economy. The dividing line in politics must be between the disruptors and those who defend a status quo that is working in nobody’s interest.

We know that net zero is the economic opportunity of a generation. Our net zero economy grew 10.1% in 2024. Net zero foreign direct investment was up 46% last year, reaching £20 billion, and 95% of major financial firms—representing over £1 trillion in turnover and £200 billion in green investments—say that they would increase UK investment with greater policy certainty, unlocking up to £100 billion. Is there policy certainty in scrapping the Climate Change Act or threatening to rip up the green contracts that the Government are delivering?

[Sir John Hayes (in the Chair)]

Order. Can you bring your remarks to a close, otherwise no one else will be able to get in?

[Tom Hayes]

I apologise.

The capital is waiting, public support is strong and technology is ready. What is needed is yet more policy certainty, clarity and courage. We have seen so much already, but there is more to do. Net zero should not be a political football. It is a strategic national mission, the UK’s growth story and a foundation for jobs, competitiveness and resilience.

[Sir John Hayes (in the Chair)]

I call Susan Murray—you have a couple of minutes.

17:20

[Susan Murray (Mid Dunbartonshire) (LD)]

I will do my best. It is a pleasure to serve under your chairship, Sir John. I thank the hon. Member for Sheffield Central (Abtisam Mohamed) for securing the debate and bringing attention to this matter.

Although some may deny its impact or severity, climate change represents the greatest modern threat to our planet. The data is clear. If we continue down our current path, millions of lives will be lost and our way of life will be changed forever. We have an opportunity to show the world that there is an alternative path to save lives and avoid catastrophe.

Steps have been taken to create a Britain at the forefront of climate action, but there are still gaping holes. Although we have enormous capacity for green energy production through wind, tidal and solar, we do not yet take full advantage of it. My constituents in Mid Dunbartonshire demand that we act faster. We must take the opportunity to produce wind turbines domestically; less than half of the wind turbines operating in the UK contain any British component. Instead, we ship turbines in from countries such as China, undermining their green credentials and costing British jobs.

We are not moving fast enough to upgrade our grid, meaning that we are restricting the energy output at some sites for as much as 71% of the time. At the same time, we seem to be ignoring the potential of community energy and local projects to take pressure off the wider grid and to provide cheaper bills to British people. It is clear that although we have incredible potential, we need to move faster to exploit it.

The Government must place decarbonisation at the heart of the UK’s industrial strategy. The net zero sector is growing three times faster than the overall UK economy and jobs in the sector pay almost 15% more than the national average. If we want good, long-term jobs for British people, we must look seriously at green energy. We can create manufacturing jobs producing the technology, jobs working on the grid, jobs working on offshore sites and many more, but only if we take climate change seriously. That means ensuring that workers and communities in sectors such as North sea oil and gas are not left behind as the industry declines, but supported to move into new, clean industries. Even if all our energy came from renewables we would need oil and gas for the foreseeable future, but it makes no sense to import gas, which is four times as polluting as local production.

The Liberal Democrats would introduce a carbon tariff to level the playing field and minimise carbon emissions. The skills already built up in Scotland’s energy sector are the skills that we need for offshore wind, grid upgrades and new green technologies, but there is an urgent need to invest in more skill training and housing if we want the sector to thrive, grow and build new sustainable jobs and communities.

The Government have listened to the Liberal Democrats before on green energy. I urge them to do so again to help create a cleaner, fairer future for our children, and across the world.

[Sir John Hayes (in the Chair)]

I call Sureena Brackenridge —you have two minutes.

17:24

[Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)]

It is a pleasure to serve under your chairship, Sir John. I thank my hon. Friend the Member for Sheffield Central (Abtisam Mohamed) for securing this important debate. I will take this opportunity to link the national Government ambition of the carbon budget delivery plan with the local government ambition of Wolverhampton’s green innovation corridor.

The benefits of the clean energy economy are well reported and evidenced: creating energy security, lowering household bills, protecting our environment and building good local jobs. For too long, global price shocks driven by conflict and market volatility have hit my residents’ pockets. By investing in home-grown clean energy—from offshore wind to solar and local generation —we are keeping more of our energy and money right here in the UK. That means greater control over prices, and a fairer, more stable energy system for households across the country.

In the west midlands, Wolverhampton’s green innovation corridor has every potential to build our industrial past into a green industrial future. By connecting the University of Wolverhampton with a local manufacturing base and skills training for the industries of tomorrow, it can create local opportunities for great jobs of the future.

What does that mean for my constituents? First, it means jobs. The green innovation corridor is set to deliver over 1,000 skilled roles including apprenticeships for young people, retraining for experienced workers, and graduate opportunities. Secondly, it means investment and regeneration. The corridor will breathe new life into old brownfield sites, creating new workspaces and better connectivity, so that investment flows into local businesses, communities and shops. By linking our local ambition with the national carbon budget delivery plan and by backing the green innovation corridor, we are supporting jobs and households in Wolverhampton and Willenhall.

[Sir John Hayes (in the Chair)]

Well done for keeping to time. I am calling the Front Benchers at 5.28 pm. I call Jim Shannon—you have a minute and a half.

17:27

[Jim Shannon (Strangford) (DUP)]

It is a real pleasure to serve under your chairship, Sir John. I thank the hon. Member for Sheffield Central (Abtisam Mohamed) for setting the scene. The Government are trying to meet their carbon budgets, and that is important, but I want to make a quick point in the time I have on behalf of those who will suffer as a result. Families in my constituency as struggling more than ever, as charitable giving lessens and the ability for charities to provide help lessens as well.

Yes, let us reach the target for carbon budget delivery, but let us make sure that that is financially viable. I know several families who were comfortable for a number of years, but who are struggling now. On behalf of those struggling families in Strangford—there are struggling families in everybody’s constituencies, not just mine—we must ensure that we can achieve the goals while ensuring that the impact on our constituents is defensible.

I have always been proud to be forward-looking, but I believe that we cannot leave struggling families on the trail behind. Meeting the targets and goals affects all of us—some can afford it, but some cannot, and they are the people we should be looking out for. I am more interested in people such as my constituents and the bread and butter issues that they focus on all the time. Let us meet the targets, but let us make sure that people are looked after on the way there.

17:28

[Edward Morello (West Dorset) (LD)]

It is a pleasure to serve under your chairship, Sir John. I congratulate the hon. Member for Sheffield Central (Abtisam Mohamed) on securing this important debate. I am delighted that after years of delays, legal challenges and missed opportunities, we finally have a new carbon delivery plan. As we all know, however, a plan is not enough—it is actions, not words, that count.

Before I get into the action that is needed, I want to first acknowledge the great progress that has been made. The UK has halved its emissions since 1990. That is an exceptional achievement and one we should rightly be proud of, but much of that progress has been made by phasing out coal. Much of the heavy lifting on hard-to-abate emissions still lies ahead: decarbonising manufacturing, transport and agriculture and improving energy efficiency, all while protecting nature.

The key to further progress is changing the narrative. The transition to a low-carbon economy is not a cost or a burden; it is one of the greatest opportunities of our time. It can bring cheaper bills, warmer homes and thousands of well-paid jobs in the green economy. It is deeply disappointing that, having once lead the UK through varying levels of success in green technology, the Conservative party has abandoned its values and veered into climate denialism. Its recent calls to scrap the Climate Change Act just show how far it has fallen from the environmental leadership that Britain once showed.

The new carbon budget delivery plan is a step back in the right direction. The Government’s plan includes bold targets: low-carbon power making up 98% of the grid by 2035, 9 million heat pumps in operation, 1.6 million homes upgraded every year, and 75% of farmers engaged in emissions reductions. The Liberal Democrats support those aims, but we also want action now. We have proposed a 10-year emergency home upgrade programme, starting with free insulation for low-income households, ensuring that all new homes are zero carbon, and extending rooftop solar through the sunshine Bill tabled by my hon. Friend the Member for Cheltenham (Max Wilkinson).

We would also provide a social tariff for vulnerable households and move older renewable projects on to cheaper, more stable contracts. The Government’s investor prospectus is a good start, but stability is what really attracts private investment. The green economy is already growing three times faster than the UK economy as a whole and employs nearly 1 million people in well-paid, secure jobs. With clear policy direction, we can accelerate that growth.

The Government must end the sporadic nature of the climate portfolio and end the stop-start conversations with the Treasury. The £8.3 billion for GB Energy is good news—having spent a decade in renewable energy finance, I can tell Members that I would have supported that if it were £8.30—but it needs to be front-loaded, not spread out over the course of a Parliament. If we want to crowd in private investment, we have to de-risk the first 10p on the pound, not the first 1p.

There also need to be long-term secure funding streams that are accessible to start-ups and innovators. The net zero innovation portfolio was a great scheme. It invested around £300 million in early-stage climate ventures, leveraging up to £3 in private investment for every £1 in public grant funding. Sadly, it was scrapped this year. Will the Government confirm whether they intend there to be a replacement to the net zero innovation portfolio? Will they also confirm that the clean tech innovation challenge will proceed in 2026, as previously announced? In addition, I urge Ministers to commit a portion of the next round of Government carbon purchases specifically to carbon removal projects, to help to establish and grow the greenhouse gas-removal market.

We must reform how the National Energy System Operator manages battery storage. By prioritising flexible storage rather than reverting to high-emission generators such as Drax, we would be able to utilise a far greater proportion of the renewable energy that we generate.

On agriculture, the plan to recognise farmers as central to climate action is great, but we need to fund them properly. The Government’s cuts to the sustainable farming initiative and delays to environmental land management schemes mean that many farmers are left uncertain about the future and unable to invest in carbon reduction and nature-friendly initiatives. The Liberal Democrats would commit an additional £1 billion a year to support sustainable farming and rural resilience.

We must also accelerate the upgrade of our national grid, and ensure that communities affected by new infrastructure share in the benefits. Clean power cannot flow if it cannot be connected. The Liberal Democrats are also calling for a UK-wide adaptation strategy to embed climate resilience into every decision and support local communities to prepare before disaster occurs.

COP30 is currently being held in Brazil, and while the world’s negotiators grapple with finding an agreement, the British public are clear that they overwhelmingly support strong climate action. They want leadership. The Liberal Democrats believe we can halve energy bills within a decade, end fuel poverty and create a cleaner, fairer and more secure Britain. In the delivery plan, the Government say that they will

“seek to improve delivery and, where appropriate, will explore further measures, to ensure that the UK will meet its international commitments.”

Well, the Liberal Democrats believe in facts. We believe in science, the opinions of experts, and the inalienable truth that climate change is an existential crisis. We are here to help to improve that delivery, explore those further measures and ensure that our generation meets our commitment to future generations.

17:33

[Greg Smith (Mid Buckinghamshire) (Con)]

It is a pleasure to serve under your chairmanship, Sir John. Since the Labour Government took office, they have pursued an ideological net zero agenda that places meeting targets above supporting our constituents and cutting bills across the country. The carbon budget delivery plan is the latest example of that: a glossy plan that completely ignores affordability and reality.

The Secretary of State has spent much of his time in office promising that his policies will cut household energy bills by £300. That promise was made at the last election and was supported by the Prime Minister, yet that figure is not mentioned once in the flagship carbon budget delivery plan. There are sections on energy security and lower bills, but nowhere does it reference the £300 promise that the Secretary of State and others from the Labour party incessantly trumpeted across the media and from the Dispatch Box. If that pledge were real—if it were costed or credible—it would surely appear in the document that is supposedly designed to deliver it. Its absence tells us everything. The Government’s priority is not cutting bills, but chasing net zero goals regardless of the cost to hard-working taxpayers.

At a recent Energy Security and Net Zero Committee hearing, senior executives from the country’s biggest energy suppliers warned that even if gas were free in 2030, household energy bills would still rise because of the policy costs being loaded on to bills in the relentless pursuit of net zero. I repeat: even if gas were free—even if the wholesale market delivered us a miracle—bills would go up, not down. That is a failure not of the market, but of Labour Government policy.

Those energy companies are not hostile to decarbonisation; they are some of the loudest champions of net zero. Yet even they warn that the current approach—piling levies, subsidies and obligations on to consumers—is unsustainable and unrealistic. When those who believe in the Government’s energy objectives start doubting the approach, perhaps it is time for the Government to revisit their plans. Even Professor Sir Dieter Helm, one of the country’s most respected energy economists, has in effect described the Government’s clean power 2030 plan as economically incoherent. As he put it, we are

“baking in very high costs”

for the future. He is right.

It is not possible to legislate for lower bills while loading more costs on to every unit of power people use—a simple equation that the Government do not seem to have grasped, exemplified by what we have all seen in the carbon budget delivery plan. It is a classic Labour approach: a headline without a policy, a promise without a plan, a bill for everyone else to pay, and a vanity project that will simply not work. The truth is that Britain will not decarbonise by taxing, banning and bribing people into submission.

As the shadow Secretary of State, my right hon. Friend the Member for East Surrey (Claire Coutinho), said at our party conference, the best way to cut emissions is to “make electricity cheap”. Cheap means clean power, because people and businesses naturally choose the most efficient technology available when it saves them money. This Government, however, have made electricity the most expensive form of energy that we produce. They have loaded every kilowatt with green levies, obligations and subsidies, and then tried to subsidise and redistribute when families cannot afford to heat their homes or to switch to electric vehicles.

We see the same erratic pattern in the operation of the Climate Change Act 2008, which forces Ministers to take decisions that make the British people less well off and our economy weaker, for the sake of meeting arbitrary climate targets. Take their boiler tax: it increases the cost of gas boilers to force people to adopt heat pumps, which may not work for them, to meet climate targets. We are chopping down trees in America, shipping them across the Atlantic and burning them in Yorkshire to generate electricity at three times the price of gas, because it is labelled as clean for the purpose of meeting the Government’s climate targets.

These are not the decisions of a Government guided by science or economics; they are the decisions of a Government trapped by targets, with a Secretary of State dogmatically following them. If the Government truly believed in innovation, they would focus on reforming the electricity market to bring prices down; they would remove the outdated levies that make our electricity the most expensive in the world; they would spend more on nuclear baseload; and they would back British energy security, from new nuclear to North sea gas, rather than making us more dependent on imported fuel by choosing to shut down the North sea.

The public understand that we must reduce emissions. They want a cleaner environment and a stable climate for their grandchildren. But they also expect honesty from the Government, and an approach that will actually work and actually decarbonise.

17:38

[The Parliamentary Under-Secretary of State for Business and Trade (Chris McDonald)]

I can say with absolute sincerity that it is a real pleasure to serve under your chairmanship, Sir John. I could not have wished for a more benevolent Chair for my first outing at the Dispatch Box here in Westminster Hall. I apologise to Members who may have been expecting the Minister for Climate, my hon. Friend the Member for Leeds North West (Katie White), but she is attending the COP. I do hope that I am not too mean a substitute.

I have thoroughly enjoyed the debate. We all recognise how important the issue is. For me, it has been a real pleasure to sit and listen attentively to colleagues from throughout the House with such expertise. I shall endeavour to respond to many of the remarks that have been made, although I feel slightly sorry for the shadow Minister, the hon. Member for Mid Buckinghamshire (Greg Smith). Everyone else in the Chamber challenged the Government for being too fast or too slow, while ultimately working towards the same objective, but he occupied a slightly lonely position. That is the position his party has chosen to take.

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.

I was pleased to hear the hon. Member for Strangford (Jim Shannon), who is no longer in his place, bring home the importance of thinking about the poorest in our society. I want to reassure him, and the House, that they are very much in my mind, and the minds of all Ministers, as we take forward these issues. That is why we are so concerned about getting bills down.

The previous Government left us an energy system that was tied to the international price of gas, which has left households with gas prices 75% higher than they were the year before Russia’s invasion of Ukraine. We have decided not to leave our future in the hands of international dictators and petrostates, but to return to energy security. That is what clean power provides us, and that is why we set up Great British Energy, which invests in the necessary kinds of projects. It also invests in community energy projects, which were mentioned by many Members, including my hon. Friend the Member for Sheffield Central.

[Barry Gardiner]

Does the Minister recognise that the policy costs mentioned by the shadow Minister are a regressive tax, and that it may be better to put those on to general taxation? Of course, the energy company obligations and other policy costs were introduced by the Conservative Government. Will the Minister give consideration to where they may best lie to ensure that what he said in response to the hon. Member for Strangford (Jim Shannon) is realised?

[Chris McDonald]

Matters of tax are left to the Chancellor, particularly this close to the Budget.

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.

[Sir John Hayes (in the Chair)]

Thank you, Minister; that leaves a moment or two for Abtisam Mohamed to complete our discussion.

17:44

[Abtisam Mohamed]

Thank you for your stewardship in the debate, Sir John; I will do my best to be as brief as possible. I thank all Members for their contributions and interventions. On the whole, they have been extremely positive, and they have wanted our Ministers to be as positive and ambitious as possible in tackling the climate crisis, not just for our constituents but for the Government as a whole.

A key point raised by the Minister was the Government’s focus on multilateralism; I welcome that approach, and our Government should take their rightful place as a strong leader on our climate obligations. It is disappointing, but not surprising, that the shadow Minister has decided to ignore the facts and expert opinions. Instead, the Opposition’s ideological position is just to pretend that the climate crisis is not something real that we are living through.

I thank you again, Sir John, and everyone else for their contributions.

Question put and agreed to.

Resolved,

That this House has considered progress on the Carbon Budget Delivery Plan.

17:45

Sitting adjourned.