[Relevant documents: Eighth Report of the Environmental Audit Committee of Session 2024-26, The Seventh Carbon Budget, HC 1327, and the Government response, Session 2026-27, HC 25; Oral evidence taken before the Environmental Audit Committee on 15 June, on Carbon Budget Seven follow-up, HC 361; Correspondence from the Minister for Climate to the Environmental Audit Committee, on The Seventh Carbon Budget, reported to the House on 23 June 2025, Session 2024-26.]

I beg to move, That the draft Carbon Budget Order 2026, which was laid before this House on 2 June, be approved.

With this it will be convenient to discuss the following: That the draft Climate Change Act 2008 (International Aviation and International Shipping) Regulations 2026, which were laid before this House on 14 April, in the last Session of Parliament, be approved. That the draft Climate Change Act 2008 (Credit Limit) Order 2026, which was laid before this House on 14 April, in the last Session of Parliament, be approved.

This week has been like no other. At this very moment, people across our country are experiencing another reminder of the world we now live in. If anyone in this Chamber still thinks that climate change is a problem for tomorrow, they should step outside today. Parents will struggle to get their children to sleep through sweltering nights. Farmers will look anxiously at weather forecasts and cloudless skies. Hospitals, schools and care homes will prepare for temperatures that would have seemed extraordinary in Britain just a few decades ago. Parts of our country are facing temperatures of up to 38° this week, while experts warn that 40° days may arrive far sooner than anyone expected. Today’s debate is not taking place against the backdrop of climate change; it is taking place in the middle of it, and I cannot make it clearer to the House that this is not normal. A Met Office extreme heat warning is in place for parts of the UK today and tomorrow. In fact, it has just confirmed that today is the hottest June day ever. In recent months the crisis in the middle east has felt like a ghost from the recent past. Once again, the world has found itself staring at a major fossil fuel-producing region and wondering what happens next. Once again, energy markets have been holding their breath. Once again, families, businesses and Governments have been reminded just how fragile the system can be. This is, of course, the second fossil fuel shock in barely half a decade. It is only four years since Putin’s tanks rolled into Ukraine and sent shockwaves through the global economy, four years since family budgets were shredded by soaring energy bills, and four years since Britain was reminded that when our energy system depends on volatile fossil fuel markets, a crisis on the other side of the world can land on our doorstep in a matter of days. When faced with challenges of this scale, there is always a temptation to focus on the immediate crisis, to become consumed by the pressures of the day, and to postpone difficult decisions for another Parliament, another Government or another generation.

Will the Minister give way?

I will make some progress. Postponing difficult decisions has never been how our country has met its greatest challenges. We have always been strongest when we have looked beyond the immediate horizon, recognised the risks ahead and taken practical steps to prepare for them. That is what the carbon budget framework represents: a science-led budget to reduce emissions by around 87% between 2038 and 2042 compared with 1990 levels, including in international aviation and shipping. The framework is in line with the advice from the independent Climate Change Committee and is endorsed by the Environmental Audit Committee, which I thank for its rigorous scrutiny, including in the evidence session that it held with me last week. Alongside the carbon budget framework, the regulations before the House today will formally include the UK’s share of international aviation and shipping emissions in carbon budgets from carbon budget 6 onwards, while the Climate Change Act 2008 (Credit Limit) Order 2026 will ensure that carbon budget 5 is met through domestic action, allowing the UK economy to capture the full benefits of the transition.

Will the Minister give way?

I will keep going. In determining the level of the seventh carbon budget, we assessed different pathways for Britain’s future. What the analysis showed was remarkably clear: whether viewed through the lens of economic growth, national security, public health or long-term prosperity, the benefits of continuing on Britain’s path to net zero significantly outweigh the benefits of abandoning it. Let me explain why.

Will the Minister give way?

I will keep going for a bit if that is okay. This is a market solution to a generational challenge, providing certainty about the destination while allowing competition, innovation and enterprise to determine the journey, and the results can be seen across the country. On the day we laid this order before Parliament, new analysis showed that Britain’s net zero economy now supports more than 1 million jobs and generated £105 billion for the UK economy alone. We see that opportunity in carbon capture projects in Teesside, in new nuclear at Sizewell C in Suffolk, and in companies across the country building the technologies, supply chains and industries that will power the next chapter of British economic growth. Indeed, as more than 75,000 people have descended on London for London Climate Action Week this week—taking part in over 1,300 events and helping to broker deals, partnerships and investments that will shape the global economy for years to come—they are doing so in a city that has established itself as the sustainable finance capital of the world. That is why support for this framework extends far beyond Government. The British Chambers of Commerce says these plans provide “greater certainty for…firms”. The CBI describes the green economy as “a powerhouse of job creation and economic expansion”. E.ON says that “the prize is bigger than emissions alone.” Business leaders, manufacturers and investors are all making the same argument. In a world competing for capital, talent and innovation, long-term certainty is not a burden on growth; it is one of the foundations of it. Secondly, if the economic case for action is increasingly clear, so is the security case. Climate change has become a central concern not just for scientists and policy makers, but for our country’s military leaders, intelligence chiefs and security experts. On the agenda for the Munich security conference, climate change sits alongside geopolitical conflict and nuclear proliferation as one of the defining risks of our age. That assessment is increasingly shared across Britain’s own security establishment. Air Chief Marshal Sir Mike Wigston has said it “threatens global resilience and our shared security and prosperity.” Baroness Manningham-Buller, the former director general of MI5, has said it is clear that climate change is the “greatest threat” we face. Lieutenant General Nugee has said: “Climate change is not an abstract environmental issue. It is now a core national security risk.” These are not campaigners or commentators; they have served their country and are people who have spent their careers identifying risks before they become crises and preparing our country for threats before they arrive. Climate change is often discussed as an environmental challenge, yet it is increasingly showing up elsewhere in conversations about food security, energy security, national resilience and the basic responsibility of Government to protect their citizens from foreseeable risks. The framework before the House is not just about reducing emissions; it is part of the long-term work of making Britain safer, stronger and less vulnerable in a more uncertain world. Thirdly and finally, we should see this transition for what it really is: one of the greatest upgrade projects in our country’s history. Too often, debates about climate change become trapped in the language of targets, regulations and emissions, but when future generations look back on this period, they are unlikely to remember the technical details of carbon budgets or policy frameworks. What they will remember is that this was the moment Britain began upgrading the system that underpins modern life. Every generation has had its national upgrade. Previous generations built the railways that connected our country, electrified our towns and cities, brought clean water into people’s homes, connected millions of households to the gas grid and transformed the way people travelled, worked and lived. Our generation’s task is no different. We are upgrading an energy system that leaves us exposed to volatile fossil fuel markets and replacing it with one powered increasingly by clean electricity generated here at home. We are upgrading homes and technology that allow families to generate, store and manage their own energy. We are upgrading transport, upgrading industry and upgrading infrastructure that in many cases was designed for a different century and a different economy. That is not a marginal adjustment to the economy we have today; it is a fundamental upgrade to how Britain powers itself, and the prize is enormous. Our analysis shows that clean power and electrification could save families and businesses £445 billion in fossil fuel spending over the next 25 years. Cleaner air could mean up to 8,000 fewer hospital admissions every year by 2050 and around £80 billion in health benefits, while action to restore nature could deliver a further £50 billion-worth of benefits.

Will the Minister give way?

No, I will make some progress. Those benefits include greater protection from flooding, cleaner rivers and greater biodiversity. But this is not simply about what we avoid; it is about what we build. Across the world, more than $2 trillion is now invested in clean energy every year—roughly twice the amount invested in fossil fuels. It is where global capital is flowing, where industries are being built and where future economic advantage will increasingly be won. I make no apology for Britain competing for that opportunity. I do not want our country watching from the sidelines while others capture the jobs, industries and investment of the future. I want Britain helping to shape that future and benefiting from it. Let me finish by saying this. Long before I entered this House and long before I became a Minister, I was one of the many people involved in the wider effort that helped to build support for the Climate Change Act, which is one of the most significant and widely supported pieces of cross-party legislation this country has ever passed.

Will the Minister give way?

Let me just finish. Back then, it often felt like a cause that sat at the margins of politics, rather than at its centre. Progress felt slow; success felt uncertain. If someone had told me that one day I would stand at this Dispatch Box I might have struggled to believe it, but what that journey reminds me of is that real change is rarely the work of one person, one Government or one political party. It happens because people keep building year after year, Government after Government, Parliament after Parliament. Eighteen years ago, this House came together to pass the world’s first climate change Act. Seven years ago, it came together again to make Britain the first major economy to legislate on net zero emissions. Different Prime Ministers, different Governments and different political traditions have all helped to write that story.

Will the Minister give way?

I will just finish. History has many authors. As a result of that shared effort, Britain was the first major economy to cut emissions by more than half, while growing its economy by more than 85% between 1990 and 2025. We have helped to inspire around 60 countries to adopt similar legislation and we have shown it is possible to combine climate action with economic growth, energy security and national prosperity. At its best, this House has always been capable of looking beyond the pressures of the moment and acting in the interests of future generations. I believe this is one of those moments, so whatever our differences on the detail I hope we can recognise what this debate is really about: the kind of country we leave behind and whether we upgrade it while we have the chance. That is a legacy worth building together. I commend these orders and regulations to the House.

I call the shadow Secretary of State.

Today, we are voting on something hugely consequential: a new net zero target that will allow Ministers and civil servants to control almost every part of the economy and the cost of goods in every aspect of people’s lives. It will affect the cost of energy, food, housing, heating, transport, holidays and shipping, and which industries will find it competitive to do business in Britain and which industries will not. Yet in this Chamber can anybody put a figure on how much more expensive this will make food or energy bills or family holidays?

Will the right hon. Lady give way?

I will happily give way for the hon. Gentleman to cite the figure.

Does the right hon. Lady not accept that the investment her Government made in offshore wind power has insulated British consumers against the fossil fuel price hikes we have seen as a consequence of the Iran war? That is evidence that investment in renewable energy is good for consumers and businesses.

I note that the hon. Gentleman did not answer my question, because he does not have an answer. Let me answer his question: on an electricity bill, 25% of the cost is a wholesale cost, and 75% is a non-commodity cost. Bills have gone up so much partly because of the taxes, levies and policies that his Government have chosen.

Will the right hon. Member give way on that point?

No, I will pursue my argument. The vast majority of the costs on an electricity bill are not to do with wholesale prices. The question that I asked the hon. Member for Mid Derbyshire (Jonathan Davies) was whether he could tell us—[Interruption.] He should listen to this; he is not even listening to my point. I asked whether he could tell us what the legislation he is voting on today will do to the price of food, energy, and holidays for his constituents.

Let me try this question: how many Members present can say, hand on heart, that they have read the impact assessment for this legislation?

I have read it.

The hon. Gentleman says that he has. Could he cite the number of jobs the legislation will create or lose in the overall economy?

The right hon. Lady’s argument would have a lot more credibility if she had not said, in 2023: “Nothing will distract us from achieving net zero or driving forward renewables…I want people to feel nothing but unadulterated optimism…We are absolutely committed to our targets.” The facts about climate change have not changed, yet the right hon. Member has changed her mind. Could that be because of those Members sitting on the Reform Bench?

The hon. Gentleman also did not answer my question on jobs. I inherited my party’s position on net zero. I made it clear from the outset that my priority was affordability for Brits in this country, and that net zero should not impoverish consumers. In fact, I made some changes that meant that Labour called me a climate denier and a flat-earther. The hon. Gentleman now comes to this Chamber, not to scrutinise the legislation that will have a massive effect on his constituents, but to criticise me for scrutinising it, asking questions and changing my party’s position. I am proud to have changed my party’s position, because I care about the consumer, about jobs, and about the price of food and energy. None of the Members on the Government Benches seems to care about those things, because if they did—[Interruption.] I will make some progress, because nobody is answering these questions. If they cared about those things, they would have read the Government’s impact assessment.

I have read it.

Well, the hon. Gentleman could not answer the question on jobs. If he had read it, he would know that the Government’s own impact assessment admits that the modelling does not consider any upside, or downside risks, to the economy arising from the energy transition. It specifically says that it does not consider the impact on jobs. That means that Government Members are voting on legislation without any idea of what it is going to mean for the British worker. The impact assessment is clear and explicit: the modelling does not analyse energy security. The Government do not know what the legislation will mean for the energy security of our nation. The head of Unite was spot on when she said at the weekend that the Secretary of State “only seems to be interested in one side of the equation, rushing Britain to net zero with almost no thought for jobs, skills and national security.” The transition has literally not been properly assessed. What is worse is that Government MPs want to make their political points, but none of them seems to care. Considering how much people are struggling and how much growth is flatlining, are Labour Members really happy to wave through those legal targets without the foggiest idea of what it will do to the economy, the cost of living or energy security?

Will the right hon. Member give way?

If the hon. Gentleman would like to tell us about the impact on jobs, he is more than welcome to do so.

I am happy to do so. Is the right hon. Member aware of the evidence from the Climate Change Committee that says that the cost of doing nothing is more expensive than the cost of everything that is needed for net zero? When she attempts to stand in the way of the transition, what she is actually doing is attempting to pile up the costs on British business and consumers, and on the sustainability of our country. She should understand the impact of her policies, rather than attempting to row back on one of the few things the previous Government should have been proud of.

I will come to the evidence of the Climate Change Committee in a second, but first I note that once again, a Member from the Labour Benches cannot cite an overall figure on jobs—I would have thought that the Labour party would be able to cite a figure on jobs.

Look, I have given way to a number of hon. Members, and nobody has had an answer. Let me put this to them—

rose—

If it is going to be about jobs, then please—go ahead.

It absolutely will be about jobs—I thank the right hon. Lady for giving way. The CBI—not the Government, but the CBI—has found that the net zero economy is worth £100 billion of investment in this country every year and supports 1.1 million jobs.

Oh dear. So the hon. Gentleman has not read that report either, because it includes among those jobs waste, recycling and nuclear power—does he think we did not have those jobs before the net zero target? It also includes soil restoration and land management. It specifically says—[Interruption.] I am sorry; Labour Members do not seem to like this, but I have actually read these reports. They do not seem to realise that that report includes a huge range of things that have nothing to do with the net zero target. I will press on. When the Climate Change Committee provides advice to the Government about what carbon budget target they should set, it uses its own costings and assumptions. Its analysis determines how billions upon billions—that is thousands and thousands of millions of pounds of taxpayers’ money—is spent. I am afraid that is deeply problematic. Why do I say that? Because the cost of offshore wind used to prepare carbon budget 7 was out by a factor of three. The Climate Change Committee said that offshore wind would cost £38 per megawatt-hour, but contracts were being signed by their Secretary of State for £82 per megawatt-hour, suggesting that something was clearly going very wrong on a key input for the exact target that we are voting on today. When I wrote to the Climate Change Committee—

I will make this point. When I wrote to the Climate Change Committee asking it to look at this matter, it sent me a dismissive reply. So I wrote about it in a newspaper. What did the committee do? It reported me—a democratically elected politician—under the Independent Press Standards Organisation editors’ code and tried to get me to remove my opinion. I did not. Just a few months later, the Government updated their own costings, not to £80 per megawatt-hour or even to £90 per megawatt-hour, but to over £100 per megawatt-hour. That is the Minister’s own figure. That means that not only was I right, but offshore wind was now predicted to cost three times what the Climate Change Committee had said. I do not know which is worse: that we are making huge decisions on the basis of such poor analysis, that nobody on the Government Benches thinks that this warrants any scrutiny, or that an unelected advisory body is using taxpayers’ funds to try to silence elected representatives rather than focusing on getting its costings right. Everybody in this House should think that is shameful. If the committee was wrong by a factor of three on offshore wind—something that we have better evidence for than pretty much anything else in the market—how can we trust any of the rest of its analysis? Let us look at some of the committee’s claims. It claims that a low-carbon electricity supply is “cheaper per unit” than high-carbon electricity. Well, if your numbers are out by a factor of three, perhaps you might think that. It also says that “most businesses will not be…affected by Net Zero”, particularly in the services sector. How does it justify that? Let me assure the House, if net zero blocks the advance of AI in this country, that will have a catastrophic impact on our services sector. Here is another claim: “a reduction in meat…and dairy” will mean a healthier diet. Who are they to tell us what to eat and to give us nutritional advice? The committee makes claim after claim and sweeping statement after sweeping statement with nobody holding it accountable. Yet this advice—this target—will affect almost every part of normal life. Hon. Members may argue that we need strict climate targets to provide certainty for jobs—that is what the Minister just said—but that is nonsense. The country doing the best at creating clean tech jobs is China, which is now the world’s largest polluter. Hon. Members may also say that this is about our moral duty to fix climate change, but I will remind them that every time a British factory shuts here, where we have some of the cleanest electricity in the world, and we import those same goods back from coal-powered China, we are not helping climate change; instead, we are increasing global emissions. Before Labour Members get on their high horse, I will remind them that the Conservatives are the only party to call for the measurement of the offshoring of emissions. Labour does not want to know because it does not care. Here is the problem: Labour Members do not want to properly measure whether we are just trading emissions here for emissions abroad because they do not really care whether this target is actually good for the worker, or good for jobs, or good for the cost of living, or good for the environment. That is why none of them cared to read the impact assessment.

I have taken interventions from so many Labour Members, and none of them could give a figure—[Interruption.] I will happily give way.

Point 299 of the impact assessment says: “The transition away from fossil fuels will lead to a net increase in job creation”. I believe the right hon. Lady said a moment ago that it does not mention at all the impact on jobs. I invite her to correct the record.

The analysis that the hon. Gentleman points to refers to TIMES modelling. That is used for the baseline. A few pages away, its says that the TIMES modelling specifically does not look at the impact of jobs on the overall energy transition. It is in there in black and white. The hon. Gentleman might desperately google it now in the Chamber, but the truth is that no Labour Members read and scrutinised the impact assessment properly because none of them cares. Let’s be honest: they are all here to read their boilerplate speeches, which will all be exactly the same, to virtue signal how much of a good person they are. That is the truth. Most of them come from climate NGOs and green lobby groups—the Minister does too, I am afraid—and they care more about ideology than evidence. How many of them have ever had to turn a profit for a living? How many have had to work out how to pay someone else’s wages? How many have had to consider all the costs that go into manufacturing and selling something in Britain? The thing is, we could do this so differently. We are 1% of global emissions; 99% are happening elsewhere. Those countries are not persuaded by Britain driving itself into poverty while the Secretary of State preaches at them from his pulpit. In fact, they are asking themselves why they should follow the path that Britain is taking when we are such an obvious example of what not to do. We are a country that is making its energy scarce and expensive, and deindustrialising and impoverishing its own citizens. What is the solution? First, we must reject decarbonisation by deindustrialisation. Therefore, we must measure the offshoring of emissions and get rid of the unilateral carbon tax and the stringent targets killing off British industry by repealing the Climate Change Act.

Given that we have reduced our carbon emissions by some 54% since 1990, perhaps the shadow Secretary of State agrees with me that we have led the way and done our bit. It is now time for others to do theirs.

I thank the hon. Gentleman for his question. The question is, can we protect the environment, the economy and living standards? Is what the Government are proposing today going to help us do those things? I would argue that it is not. [Interruption.] Well, let’s talk about it: Labour Members will vote today to increase the cost of aviation and shipping when our competitors in Asia, the middle east and the US are not doing so. That is mad. The first part of our plan is to save British industry. The second is to make electricity cheap. Just 10% of our emissions are in the electricity system; the vast majority are in transport, industry and buildings. Our electricity is clean. Does Labour even realise that? It is some of the cleanest electricity in the world. The problem is that it is too expensive and deterring electrification. I am not someone on the right who thinks that all clean tech is stupid, but I do think that cheap electricity and consumer choice should be king. Thirdly, we should wholeheartedly embrace innovation and exports of British clean tech, whether that is the next generation of nuclear, software or consumer products. Finally, we should pay much more heed to nature—something that we were proud to do but this Government are much less keen on. Funnily enough, they are much more attracted to net zero than nature. Perhaps that is because the former gives them unlimited powers to dictate to people what they can and cannot do, and to tax people who do things that they do not like. That is, after all, a socialist’s dream. I would bet everything that our approach is better for the British economy and the environment, but it would mean wresting this agenda away from the incredibly well-funded green lobby groups with vested interests, who provide these figures that Members on the Labour Benches all merrily cite without having actually read the reports. And, frankly, they do not have the balls to do it—they do not even have the balls to take on their out-of-control Secretary of State. I will end on this. The public keep being promised cheaper energy and more jobs, yet those things are not materialising. If people want to know why Governments keep failing, they should look at this impact assessment, which I am afraid is mumbo-jumbo that does not tell the reader what the target will do to the cost of food or energy, or the cost of business. They should consider the fact that parliamentarians are prepared to wave it through today. The Minister did not even take any questions. This is meant to be a debate in which we scrutinise these important decisions, but she did not want to answer any questions. Who in the public voted for this? Who in the public voted for more expensive food, energy bills and boilers? Who voted to increase our goods imports from China? Let us be very clear: this legislation takes control away from Ministers and gives it to civil servants, unaccountable bodies and activists who will tell Ministers that they cannot prioritise the cost of living or the economy, even if they were elected to do so. The Energy Secretary might not be in post for much longer, but the legacy of his target will be to make us poorer and weaker. Ministers will be more bound by red tape and less able to deliver on their promises, but it does not have to be that way. This is the moment to take back control for our constituents and say that Ministers should not be bound by legislation waved through with no scrutiny—by Ministers who will not take any questions. Ministers should be bound by the democratic promises they have made to the electorate. That is how we fix this. That is how we put our constituents back in the driving seat, and that is why Members should vote to reject this legislation today.

As colleagues will understand, this is a three-hour debate and a remarkable number of Members wish to contribute, so Back Benchers will shortly be on a speaking limit of five minutes. First, I call the Chair of the Select Committee, Toby Perkins.

I very much welcome the draft Carbon Budget Order 2026, which sets the level of the seventh carbon budget on the way to our long-term and previously cross-party aim to balance the UK’s carbon emissions by 2050. I have to say that the speech we have just heard from the right hon. Member for East Surrey (Claire Coutinho) was quite remarkable because, at the most fundamental level, it failed to understand what we are doing today. The sixth carbon budget passed by the previous Government in 2020 only got its delivery plan in 2025. Today, we are debating our aim for 2038 to 2042. At this moment, it is not prescriptive about how we get there. That is why, at the most fundamental level, the shadow Secretary of State did not understand what she was debating, and why she failed to get answers to some of the questions that she thought should be answered. I am afraid that, at the most fundamental level, she was on the wrong path.

My hon. Friend is making an important point. I have been contacted by many constituents who have engaged with the “People’s Emergency Briefing” campaign. One of its key asks is greater public awareness of the effects of climate change. Does he agree that the Government should do more to make sure that people are aware of the effects of climate change? Perhaps we could start with the shadow Secretary of State.

That is a very good place to start, because the shadow Secretary of State suggested that the Climate Change Committee has attempted to silence her. It has not attempted to silence her. What it attempted to do, on a point of fact, was inform her of the basis on which her letter to the committee was wrong. This was not a matter of opinion; the Climate Change Committee was simply explaining to her where the cost of electricity comes from. My hon. Friend makes a good point. The shadow Secretary of State talked about transparency, which is interesting because the fact that we are having a debate on the seventh carbon budget is completely different from what happened on the fourth, fifth and sixth carbon budgets. The sixth carbon budget, under the previous Government, was approved in 17 minutes in a Delegated Legislation Committee, far away from public scrutiny. These are crucial matters. I agree with the shadow Secretary of State that they will have wide-ranging impacts on all of us, and they should be debated on the Floor of the House. I welcome that this Government, unlike the previous one, have brought this forward and reserved time to debate it. In debating this order, it is so disappointing that the political consensus that previously existed has evaporated. It lasted from the Labour Government’s seminal introduction of the Climate Change Act 2008, which was strengthened and updated in 2019 by the Conservative Government. With the introduction of the Climate Change Act and the pathway to net zero, Britain was world-leading in our ambition. The approach was so admired that, far from what the shadow Secretary of State said, it was copied by many other legislatures. How tragic that the Opposition should choose to jettison one of the greatest achievements in their 14 years in government in the face of a threat from the climate deniers in Reform. The approach pursued by successive Governments is working. Since 1990, the UK’s greenhouse gas emissions have been cut by 54%. At the same time, the UK economy has grown.

Will the hon. Gentleman just answer a very simple question, as this is in the Labour manifesto and the Secretary of State bangs on about it week after week? When will energy bills and electricity bills come down?

There are many different things that impact energy prices. We have seen £150 taken off the price of bills. I think there is more that can be done to reduce electricity prices, and I will come to that. The reality is that the hon. Gentleman is an advocate of a greater reliance on gas and oil. If anything is explained to us, it is that we have no control over energy prices while we are reliant on gas and oil. Everything that has happened since 2022—[Interruption.] The hon. Gentleman puts his head in his hands. I say to him that the amount that the Government spent in 2022 to cover the cost of the increase in energy prices caused by the start of the Ukraine war was greater than the cost of everything that we will do on net zero between now and 2050. That is the reality: £44 billion pounds was spent propping up people’s gas, electricity and fuel bills at the time of that crisis. That is why we need to get away from that dependence. As I was saying, since 1990, the UK economy has grown, partly powered by the green economy, which last year was found to be growing at three times the rate of the rest of the economy, providing jobs and growth across the country. The most recent CCC assessment found that the UK remains among the leading group of countries that demonstrate sustained emissions reductions. The transition is the pro-business choice. This year’s CBI and Energy and Climate Intelligence Unit report on the net zero economy found that green businesses and their supply chains generated £105 billion in gross value added for the UK economy, as well as supporting over 20,000 small businesses and a million jobs.

My hon. Friend is making an excellent speech, with which I very much agree. I want us to tackle climate change as fast as possible, and to accelerate the bringing online of that cheap, clean energy that will help both households and businesses. Does he, however, understand the pressures on the automotive industry? Will he join me in asking the Minister to look carefully at a rescheduling of current targets so that we do not have a knee-jerk reaction, but instead have a long-term plan that industry can sign up to, which would provide the certainty that is needed in that particular sphere while we battle on with the other things we are doing to bring down emissions?

My hon. Friend makes an important point, and I will come to the zero emission vehicle mandate shortly. I agree with the shadow Secretary of State that we need to be careful that we do not just offshore emissions, so I will come to some of the stuff that we need to do about energy-intensive industries. None the less, I think it is important that we give business the certainty that it requires. During the EAC’s inquiry into carbon budget 7, we heard time and again from business and investors that a long-term plan and policy certainty are needed. The forthcoming delivery plan and CB7 are exactly the sort of long-term planning that businesses need to have confidence about the UK’s direction of travel, in order to invest and innovate. As a world leader on clean energy, our approach puts Britain on the front foot in a globally competitive and quickly changing world. The setting of the seventh carbon budget today is not just a technical milestone but a statement of our long-term ambition to secure the UK’s economic future and our competitiveness on the global stage, alongside a greener and healthier future for our children. The EAC analysis confirms that the pathway to CB7 is both credible and achievable. It is clear that, although they accept the overall figure, the Government will not adopt all the approaches suggested by the CCC, and the delivery plan that the Government adopt is what will dictate the success or otherwise of CB7. That is why the shadow Secretary of State was unable to get answers to all the questions she was posing. This provides an overall framework but it is not the Government’s delivery plan. It is within the delivery plan that we might expect to get some of the answers to the shadow Secretary of State’s questions, which she would have known if she understood what the carbon budget order process was all about. The Climate Change Committee has said: “The slow pace of electrification is putting the UK’s climate targets at risk and is a missed opportunity to enhance UK energy security in the face of rising threats, leaving the UK exposed to geopolitical shocks…Following the recent increase in fossil fuel prices, bills have increased almost four times more for a typical household with a gas boiler and a petrol car, compared to a household with a heat pump and an EV.” People need to know how net zero will result in a stronger, more resilient economy, lower bills and greener and healthier places to live. The EAC’s report is tagged to the debate today, and I would like to place on record my thanks to Committee specialist Dawn Amey for her work on that really important report. Our report identifies several areas in which further action is needed to achieve the seventh carbon budget. I would like to highlight just three. First, the Committee identified that bringing down energy bills and making electrification attractive and affordable was fundamental to making the green transition work for businesses and people. This Government are accelerating the roll-out of renewables in Britain and investing in grid and network infrastructure, both of which will have the effect of bringing down bills, but more action is needed. We recommended removing further policy costs from energy bills and putting them on to general taxation. This will improve the cost differential for making cleaner choices for households and industry.

Ahem!

Absolutely, Madam Deputy Speaker; I will move straight on. Secondly, we heard again and again from businesses that long-term policy certainty and delivery across Government was crucial. Thirdly, we heard that fairness was key. The green transition is necessary and brings huge potential benefits, but it must be done in a way that brings people and businesses along. Decarbonisation must not mean deindustrialisation. Forcing production to relocate abroad weakens the UK’s industrial base and undermines support for decarbonisation while failing to reduce global emissions. In summary, the path laid out by this order is credible and achievable. The goal is a vital one—indeed, this is the fight of our age—but it must be done in a way that allows our economy and our people to thrive, and ensures that it is fairly distributed so that it is accessible to all. The prize is not just a more sustainable future but quite possibly the future of our race on this planet.

All Back Benchers will now be on a five-minute speaking limit, but first I come to the Liberal Democrat spokesperson.

I thank the Minister and the Government for allowing a good length of time for us to debate and give due consideration to this issue of national security, just as it demands. On the day that we are debating the draft Carbon Budget Order 2026, which aims to balance our carbon emissions from 2038 to 2041, it has just been confirmed that we have surpassed the UK’s record June temperatures, which were set in 1976. The record has been surpassed in Charlwood in the constituency of my hon. Friend the Member for Dorking and Horley (Chris Coghlan). The Met Office has also issued a red warning for extreme heat this week, with temperatures likely to hit 40°C, but once again the UK is woefully unprepared because we keep putting our head in the sand. Climate change is no longer a future threat; it is here with us today and the consequences are already being felt. The shadow Secretary of State, the right hon. Member for East Surrey (Claire Coutinho), asked about costs. This week alone, hundreds of schools have closed. GCSE and A-level students are taking what may be the most important exams in their lives in sweltering conditions, in schools unfit for the current temperatures. Public transport is gridlocked and trains are being cancelled today. Telecommunications are down and the economy faces hundreds of millions of pounds of lost productivity and infrastructure failures. Turning to the public health costs, last summer’s heatwaves contributed to an estimated 16,500 avoidable excess deaths across Europe, with 1,504 heat-associated deaths last year in the UK alone. We know that that is affecting our elderly and the most vulnerable.

The hon. Member is making an important speech. She highlighted the record-breaking June temperatures, and I heard Members behind me talk about how it is lovely and warm, but she highlights the very real human cost and the number of deaths per year that we are already seeing. Did she hear the Climate Change Committee highlighting that on the current trajectory, if we do not take action by mid-century, we will see 10,000 unavoidable deaths per year due to heat? Does that not show how serious the situation is?

Absolutely, I agree with the hon. Member. Let us no longer hide from this, but look it clearly in the eye: there are clear costs. They are no longer in the future; they are here now. There are costs to our economy, but also to our communities. Let us talk about food costs. Food supplies are coming under increasing pressure. Three of the UK’s worst harvests on record have occurred within the last five years, hitting our farmers and driving up costs for families at every shop. Floods and wildfires are making homes uninsurable and putting lives and livelihoods at risk. But this is much more than a story about a few hot days. If we think that this week’s heat is uncomfortable, the difficult truth is that what today feels exceptional will increasingly become normal, and without purposeful climate action, it will keep on getting worse.

The hon. Member is making an important speech. Climate change is one of those issues that my constituents contact me about all the time, particularly my young constituents. This is something that really bothers them as much as it does us. Does she agree that climate change is something we are experiencing now—we know that when we step outside? Does she also agree that a dead planet with plenty of jobs is no good for any of us, so we need to focus on this and deal with it?

Like the hon. Member, I regularly meet young people across my constituency. I find it hard to look my children and children in my constituency and beyond in the eye, because that is one of the things they talk about the most. I challenge any MP in this Chamber to say that they do not receive those emails or have those meetings in schools where this issue is brought up. I feel that responsibility deeply, and I believe that that feeling is shared across the majority of those in this Chamber. Without action, we risk handing our children and the next generation a Britain where extreme heat regularly keeps children out of classrooms. Did we not learn from covid, during which the more disadvantaged were left behind because they were told to go home? They did not have large homes, cool gardens or broadband, and that is happening yet again this week. We will have a Britain in which thousands die prematurely each summer and in which water scarcity, with a deficit of 5 billion litres a day of public water, is a reality. In my constituency of South Cambridgeshire, which is one of the most water-stressed in the country, this issue is affecting growth right now, so we know how critical it is.

We should add that water shortages are a real cause of conflict. Many communities will be displaced. Anybody who is worried about migration now should be deeply worried about migration in the future, because people will simply be displaced—

Shut the borders!

They will come, and you will shut the borders, but we will have wars over water shortages. We absolutely will. It sounds alarmist, but we can do something about it. We should not put our heads in the sand. Does my hon. Friend agree?

I thank my hon. Friend, as always, for her passionate defence and her knowledge on this issue. I worked for 20 years in east Africa, southern America and the Caribbean on UK climate policy, including under the previous Conservative Government. I saw countries already facing water shortages and what that meant: devastating crops and economies, and putting countries into recurrent economic recession. We must be committed to net zero emissions by 2050 because the science when the former Government agreed this—

The hon. Member is making an emotional speech, and I understand she cares deeply about this issue. This target is imposing costs on our businesses in Britain, which is driving them away from one of the cleanest energy systems in the world. Our refineries now pay more on their carbon tax bill than they do on their wage bill. What does that mean? It means we are importing back those same goods from countries such as India that have higher emissions—twice the emissions, in fact. Why should we set a target more onerous than that in other countries, driving production away, only to import goods with higher emissions? What does she think that will do for climate change?

Perhaps I would contest the fact that we cannot equate the emotion with a rational mind as well. These are science-based targets that the hon. Member’s Government agreed to set. What is recommended in the carbon budget order is set by the independent Climate Change Committee, with robust figures, and the science has shown us that this is our best chance to limit warming to under 2°. Global collective action avoided—at least for now—a 4° warmer world, and as I understand it, the Treasury has accepted modelling to show that we have accepted a 2° warmer world. It means that every Department will have to look at what a 2° warmer world means and how we adapt to that. I agree, however, that the impact on our industry, with some of the highest energy prices, means that it is less competitive. Let us therefore work together and focus directly on how we can get energy bills down. The Liberal Democrats welcome the seventh carbon budget, and we are glad that the Government have accepted the advice of the robust and science-based Climate Change Committee, which puts us on a consistent and achievable pathway to meeting net zero while building a fairer and thriving new economy.

Does the hon. Lady agree that we will never persuade other countries to take action to reduce their carbon emissions unless we show global leadership? Will she join me in congratulating the Prime Minister, who went to COP29 in Baku, announced an ambitious nationally determined contribution of reducing emissions by 81% by 2035? That was real climate leadership. Having been at that COP, I know that there was such disappointment among other countries about the fact that the previous Government had stepped away from showing that kind of leadership.

I very much appreciated the work that the hon. Member did in her former role, and we were together at that COP meeting. Yes, I congratulate the Prime Minister, but I also congratulate former Prime Ministers. I was working internationally, and I worked on the macroeconomic budgets of developing countries, particularly the emerging economies, and we saw what they could do to follow the UK’s lead and leapfrog technologies in their economies. I absolutely agree with the hon. Member, which is why it is disappointing to hear from those on the Conservative Front Bench that they want to delay science-led targets and oppose environmental action, which would lead the world in a more insecure and uncertain place, and leave businesses without the certainty they need. I urge them to help us rebuild the consensus that we need. It can only smell of a desperate attempt at political opportunism to join Reform and gamble with the lives and livelihoods of future generations.

If the evidence is so science-led, will the hon. Member explain why the Climate Change Committee was out by a factor of three—300%—on the cost of offshore wind, which is one of the key inputs for the target that she will be voting for today?

I will look forward to seeing its answer when you send a letter back—

Order. When she sends a letter back.

When a response to the letter comes back. Let us talk about the economics.

It is an excellent idea to talk about the economics. The hon. Member for Chesterfield (Mr Perkins) could not answer this simple question, but perhaps the hon. Lady can instead: when will the bills come down?

The answer to that is in two ways. First, we must take gas out of the system as much as possible. Secondly, we must fix a broken electricity market. The way we charge customers and businesses right now is broken, and we need to change that. I do not believe in what happened under a previous Government, when George Osborne as Chancellor reduced taxation on oil and gas companies three times. By the end of that we had negative receipts to the Treasury, because we were also looking at decommissioning exemptions. Until some of the windfall tax profits came in, negative receipts were coming into the Treasury at that point. If we talk about the economy, let us talk about the transition. As we have already heard, research from the CBI and the Energy and Climate Intelligence Unit shows that the green economy is already contributing more than £100 billion and over 1 million new jobs. Clean power and decarbonisation are about growing our economy, creating those jobs, lowering energy bills and strengthening our energy security. Although we welcome the carbon budget, setting targets is the easy part; delivering them is what counts. That is why we look forward to the Government’s delivery plan and seeing the steps that will be taken, because we worry that there is a risk they will fall short. The carbon budget will take much more than decarbonising our power supply and cannot be delivered in a centrist way from Whitehall alone. We Liberal Democrats want to see more action and ambition from this Government, not a focus on energy alone. Emissions reductions will be experienced in people’s lives, and not just environmentally but economically, through changes in how homes are heated, how people travel and how energy is used. Local authorities, communities, farmers and businesses will be required to be partners in delivering change. We will have to double our efforts to restore nature, which is one of our most powerful tools for tackling climate change, by more generously supporting our farmers to accelerate tree planting and peatland restoration. But please, we should not treat nature protections as a blocker to economic growth. I ask the Government to get rid of the lazy, reckless rhetoric that divides climate and nature, rather than seeing them as indivisible necessities. We will also have to increase powers and funding for local authorities and communities to implement credible local climate and nature delivery plans.

My hon. Friend knows well about the issues of coastal erosion on the north Norfolk coast and the existential threat to communities such as Trimingham and Happisburgh. There is hard work being done by our local authorities and our Lib Dem councils through schemes such as Coastwise, and there is much more to do in the future, but does she agree with me that everything being done to protect those communities will be undermined by the worsening climate emergency, which has sped up erosion and will cause it to worsen further?

I feel deeply about what my hon. Friend says. He is a well-known champion for rural and coastal communities that are facing such an insecure future, not knowing whether their homes will still be standing and whether they will be insurable. That is definitely something we need to look at. Most importantly for this carbon budget, as we have heard from Members across the Chamber, electrification across key sectors is the key to rapidly reducing emissions and helping households to cut bills. Today, the Climate Change Committee has warned that progress in electrification has slowed, with heat pump installations up just 7% this year compared with 56% the year before. What is more, the share of electricity in industrial energy use fell last year, so we must see greater acceleration of electrification.

On seeing a new development recently, I was dismayed that the developer said they were not putting in heat pumps because the cost of electricity meant that people would rather have gas boilers. Does my hon. Friend agree that if we removed the renewables obligation levy from electricity, so that we were fairly pricing electricity—currently, electricity is unfairly disadvantaged—we would incentivise far more heat pump installations?

My hon. Friend often brings that issue up in the Chamber and in the Select Committee. We have to fix the broken system whereby households and businesses do not feel the benefits of cheaper renewable energy from solar and wind. Finally, the Liberal Democrats believe that building public confidence in the transition to net zero requires people to see the benefits in their own communities. That means empowering those best placed to deliver change on the ground. Local authorities, community organisations and local leaders understand the needs of their areas, can bring people with them and are uniquely placed to turn national ambition into practical action. We need regulatory change so that community energy projects can sell energy locally, but those bodies can also take action on better public transport, warmer homes, nature restoration or street-by-street electrification. Too often local climate action remains fragmented, underpowered and dependent on short-term funding. Critically, local authorities still have no statutory responsibility for delivering net zero for climate and nature duty. Such responsibility has been voted down every single time it has been introduced in devolution legislation. Will the Minister look at placing local authorities at the centre of delivery of the seventh carbon budget by legislating for a clear climate and nature statutory duty for local authorities, and by ensuring that they have the funding and powers needed to unlock these opportunities? Many Liberal Democrat Members have been local councillors and we know that local authorities can do that, together with local people. Climate change will not wait and neither should we—the time is now.

With an immediate five-minute time limit, I call Olivia Blake.

I declare an interest as chair of the Climate and Nature Crisis Caucus. I also refer Members to my entry in the Register of Members’ Financial Interests. It is a pleasure to speak in support of the Carbon Budget Order 2026. As I stand here, the UK is experiencing a frightening heatwave and a rare red weather warning, which means a risk to all, not just the vulnerable. That is how hot it is outside. Another heat record has been absolutely smashed. It was 36.1°C last time I checked, but who knows if it has gone up in the minutes that we have been sitting here? Surely Opposition Members cannot now bury their heads in the red-hot sand and deny that climate change is real. It is coming fast, and we are living through it right now.

This is incredibly frustrating. Scrutiny is not the same as climate change denial. Asking questions on behalf of our constituents, industries, households and businesses that will front the costs of this measure is not climate change denial. Will the hon. Member and the rest of the Labour Members here recognise that?

I wonder whether the hon. Member will vote against this measure. That would tell her constituents very clearly her view on this matter. Back in 2008, under a Labour Government, the UK became the first country to introduce a comprehensive climate framework through the Climate Change Act, which set out the legally binding five-year carbon budgets that we have been reviewing and looking at. As has been said, with carbon budget 6 we did not get the opportunity for scrutiny that we should have got. That legislation was groundbreaking and ensured that Governments can be held to account for delivering long-term climate action. I thank the Minister for her efforts to bring that about. Nearly two decades later, we can see the impact of that foresight. The UK has successfully halved its territorial greenhouse gas emissions compared with 1990 levels, as we have heard, with much of that progress driven by decarbonisation of the energy system. That is a significant national achievement that we should all be proud of, and it is evidence that ambitious climate policy can deliver real results. It is therefore fitting that it once again falls to a Labour Government to confront one of the defining challenges of our times. The seventh carbon budget commits the UK to reducing emissions by 87% by 2040 compared with 1990 levels. If achieved, that will mark substantial progress towards our legally binding commitment to reach net zero by 2050. However, at present the UK is built for a climate that no longer exists. The economic impacts are staggering, costing the UK economy around £60 billion a year—about 2% of GDP and rising—through things such as flood damage, loss of crops and other forms of weather damage. We should also be mindful of the growing environmental footprint of our digital infrastructure. As data centres expand across the UK to meet rising demand, their substantial energy consumption underlines why decarbonising our power system is not simply an environmental imperative, but an economic one. That would provide more opportunities in that space. I welcome this budget. As we know, climate action is about more than meeting targets; it is about building a country where children are not exposed to toxic air, and where we have warmer, well-insulated homes, lower energy bills and greater energy security. It is about ensuring that future generations inherit a safer and more sustainable world. However, support for the Government’s ambition should not mean complacency about the scale of the challenge ahead. We face many interconnected crises, such as the climate crisis, the cost of living crisis and the nature emergency. Families continue to face high energy costs, while communities increasingly experience the impacts of flooding and extreme weather. The answer is not to slow down the transition and make things worse, but to accelerate it in a way that delivers tangible benefits for our communities.