I rise to support amendment 183 on the changes to the climate change levy. The UK Government’s idea to have a climate change levy was admirable. It was introduced in 2001, and it has been a positive step. It is completely reasonable that companies should be made to think about their energy usage, and the best way to do that is to tax them on it. The hon. Member for Salford and Eccles (Rebecca Long Bailey) made a wide-ranging speech on a series of matters, some of which I was going to speak about, so I will curtail my speech somewhat.
Although reducing companies’ energy consumption and usage is a great idea, it fails to take into account the fact that some methods of generating electricity are better than others, particularly in terms of climate change. We cannot tax energy usage across the board given that energy generated from, say, onshore wind is much cleaner and better than energy generated from, say, a coal-fired power station. Those two things are very different, and it is completely reasonable to have variable tax rates for those two things.
The hon. Lady spoke about some of the impacts that the Government’s energy policy is having on low-carbon energy. This Government do not have a good record on supporting low-carbon energy. Their support for nuclear has been widely reported, but the situation is very difficult for companies that are innovating in providing other forms of low-carbon energy in this ever-changing climate and in the UK Government’s current policy framework.
It was announced in June that the Scottish Government had managed to meet their target for reducing greenhouse gas emissions by 2014. The target was a reduction of 42%, and it happened six years early. That was an excellent achievement for the Scottish Government and for Scotland as a whole, with everyone working together to reach it. However, it will be very difficult for us to keep up that level of achievement with the UK Government’s current energy policy. For example, there is no clarity about when there will be a new pot 1 for contracts for difference. That pot is for onshore wind, which is very important. It is very clear that onshore wind is an established technology for generating electricity cleanly, and the UK Government need to provide greater clarity about when the next CFD round for it will be.
With Brexit, Scotland will have a major problem in that the funding for low-carbon energy and low-carbon energy projects, particularly the groundbreaking ones,
has come from the EU. I know that this is slightly outside the remit of this debate, but I would appreciate it if the UK Government looked at whether this funding will continue to be provided because we should continue to innovate in low-carbon energy in Scotland, which has massive natural resources.
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The hon. Lady also mentioned the absolutely shameful decision on carbon capture and storage, with the rug simply being pulled out from under the feet of investors. I tackled the Minister of State, Department of Energy and Climate Change, about this in the Scottish Affairs Committee a couple of weeks ago, and I was not happy with her response. I am not happy that I cannot see a climate in which carbon capture and storage can now be taken forward. The UK Government should have provided more certainty. If they suddenly decided they supported carbon capture and storage, I could completely understand it if nobody took it up, because the Government might change their mind again.
The climate change levy is penalising low-carbon electricity and putting barriers in the way of reducing carbon emissions within the climate change targets. That is not what we want: we should be moving forward, but this is a regressive step. The Government should produce a further report, as amendment 183 suggests, and I back that Opposition amendment.