Business, Energy and Industrial Fifth Special Report of Session Ordered by the House of Commons to be printed 7 September 2021 by authority of the House of Commons

Business, Energy and Industrial Strategy Committee The Business, Energy and Industrial Strategy Committee is appointed by the House of Commons to examine the expenditure, administration and policy of the Department for Business, Energy and Industrial Strategy. Darren Jones MP (Labour, Bristol North West) (Chair) Alan Brown MP (Scottish National Party, Kilmarnock and Loudoun) Judith Cummins MP (Labour, Bradford South) Richard Fuller MP (Conservative, North East Bedfordshire) Ms Nusrat Ghani MP (Conservative, Wealden) Paul Howell MP (Conservative, Sedgefield) Mark Jenkinson MP (Conservative, Workington) Charlotte Nichols MP (Labour, Warrington North) Sarah Owen MP (Labour, Luton North) Mark Pawsey MP (Conservative, Rugby) Alexander Stafford MP (Conservative, Rother Valley) The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the internet via © Parliamentary Copyright House of Commons 2021. This publication may be reproduced under the terms of the Open Parliament Licence, which is published at Committee reports are published on the Committee’s website at and in print by Order of the House. The current staff of the Committee are Bradley Albrow (Second Clerk), Dawn Amey (Committee Operations Manager), Zereena Arshad (Committee Specialist), Gary Calder (Senior Media and Communications Officer), Dr Rebecca Davies (Clerk), Beth Dingley (POST Fellow), John Hitchcock (Committee Specialist), Catherine Kisanji (Committee Specialist), Becky Mawhood (Senior Committee Specialist), Owen Sheppard (Media and Communications Officer), Louise Whitley (Senior Committee Specialist), and Sue Wrightman (Committee Operations Officer). All correspondence should be addressed to the Clerk of the Business, Energy and Industrial Strategy Committee, House of Commons, London SW1A 0AA. The telephone number for general enquiries is 020 7219 4494; the Committee’s email address is beiscom@parliament.uk. You can follow the Committee on Twitter using @CommonsBEIS

Fifth Special Report of Session 2021–22 On 8 July 2021, the Business, Energy and Industrial Strategy Committee published its Second Report of Session 2021–22, Climate Assembly where are we now? (HC 546). The Government’s response was received on 2 September 2021. The Government’s response is appended below. The Committee’s recommendations are in bold type, the Government response is in plain type. 1. Despite its commitment to engage the public on the key choices to be made on the path to Net Zero, the Government’s initiatives to date, though welcome, are insufficient. The lack of specific plans to engage with those who are no longer in formal education, or those who are disengaged are particularly stark and must be remedied. (Paragraph 20) 2. Achieving our net zero target will require not only changes to our energy systems and infrastructure, but shifts in how we as individuals travel, what we buy and how we 3. In November 2020, we launched the brand ‘Together for our Planet’, marking the one year to COP26 milestone, including a dedicated website, a push across government digital channels, ministerial activity and stakeholder engagement. This revitalised domestic climate campaign aims to engage the whole country in the conversation around climate change in the run up to the COP26 summit. It will raise awareness of climate issues and lay foundations for supporting sustainable behaviours long-term by driving awareness, building credibility and creating a launchpad for a powerful legacy campaign. 4. Our Together for our Planet campaign is building momentum in the lead up to COP26 by showcasing how people across the UK are going One Step Greener to tackle climate change. Our 26 One Step Greener champions will show how taking one step can have a positive impact on the environment, encouraging the general public to also do their bit, however large or small. We will work across government and with our commercial partners to encourage and promote the One Step Greener initiative—creating a mass movement of green steps across the country in the lead up to COP26. 5. As part of the campaign, there will be stories of real communities and people tackling climate change through their jobs, community action and innovation to bring the story of tackling climate change to life, telling a story of hope and optimism for the future. This will be implemented through digital channels, PR, our partners and some paid-for 6. We will work closely with young people, schools, civil society groups, businesses and people across the UK to unite a broad spectrum of voices as part of our conversation on tackling climate change, creating momentum and engaging a diverse audience—including those who are harder to reach. 7. In addition, as part of COP26, small businesses from across the UK are invited to join the green business revolution and commit to becoming more sustainable. Fifth Special Report of Session 2021–22 8. By November, the aim is for as many UK small businesses as possible to join the ‘Race to Zero’—a global effort to reduce the amount of greenhouse gases we all generate to zero by 2050. This is particularly important as SMEs account for 99.9% of the business population (5.9 million businesses). 9. The objectives of the campaign are a) Raise awareness of climate change among small businesses & consumers. b) Encourage uptake of specific actions to reduce emissions, supporting the UK’s c) Generate place-based interest and press coverage ahead of COP26 in Glasgow. 10. Taking action on climate change will help businesses to grow, seize new opportunities and adapt against the challenges of a changing planet. Reducing emissions can lower businesses’ running costs, save them money, and attract new customers who 11. Many small and micro businesses across the UK are keen to tackle climate change but find it difficult to know how or where to start. The first step these businesses can take is to visit our new digital platform and sign up to the globally recognised small business climate commitment. Here small and micro businesses can also get help and advice on how to be greener and save money. 12. The new digital platform is embedded on the existing SME Climate Hub, which is part of the global Race to Zero campaign. It brings a UK focus to this high level, international 13. Signing up allows businesses to publicly commit to becoming greener, plan the steps they will take to get there, show customers they are serious about climate, and help to start 14.
We plan to set out further plans and our public engagement approach in the Net Zero Strategy, which aims to increase awareness of the actions needed for net zero and laying the foundations for this transition across the UK. 15. We are also already conducting widespread work targeted at specific policies. In many areas, delivering net zero will require the uptake of new lower carbon technologies, such as electric vehicles or heat pumps. The Government has funded several digital tools to support people to adapt to these new technologies and to engage people in how they can reduce their carbon footprint. 16. To help reduce energy use in the home, we have introduced the Simple Energy Advice service—a new digital-led service which provides impartial and tailored advice on how you can cut energy bills and make your home more energy efficient. This has had 1.4m users since its launch in 2018. We are also continuing to increase customer awareness of EVs through the ‘Go Ultra Low’ website, providing information on electric vehicles, which has 60,000 visits per month on average. We continue to evaluate these digital tools and assess how they can be improved upon to engage an ever-greater range of individuals. Fifth Special Report of Session 2021–22 17. We agree with the Climate Change Committee and endorse its recommendation that the Government must publish a net zero Public Engagement Strategy, which includes detailed plans for education and engagement during the transition to net zero. We recommend that the Government base the content of the Public Engagement Strategy on the conclusions from the Climate Assembly UK report, and explicitly refer to the Assembly’s recommendations on a topic where relevant. (Paragraph 21) 18. The Public Engagement Strategy should include details of how the Government will work to engage all segments of the public, including those who are no longer in formal education, or those who are disengaged. This should be published as soon as possible, but, at the very latest alongside the long-awaited Net Zero Strategy. (Paragraph 22) 19. Climate Assembly UK has proved that deliberative engagement is important for both building consensus and maintaining public trust in the net zero transition and will facilitate the behavioural change required to underpin a successful transition to net zero. We recommend that the Government, in its Net Zero Strategy, sets out its plans for deliberative engagement on net zero policies through citizens assemblies, citizens juries and other methods. (Paragraph 31) 20. As we deliver on the UK’s net zero target, there will need to be increasing information and citizenship involvement around climate change and net zero. Public engagement can help build awareness, acceptability, and uptake of sustainable technologies and approaches over the long term and can also help improve the effectiveness of policies. We plan to set out our public engagement approach in our Net Zero Strategy. 21. Findings from the Assembly form an important addition to the Government’s evidence base on assessing the UK public’s understanding, attitudes and perceptions around net zero. This evidence base is being used in several ways, including to inform development of the Net Zero Strategy, the Heat and Buildings Strategy and the Transport Decarbonisation Plan, as well as to inform the development of public engagement approaches. 22. Government continues to build its activity on public engagement on net zero, both in communicating the challenge, and giving people a say in shaping future policies. This is an important part of our work. On communicating the challenge, our revitalised domestic climate campaign, ‘Together for Our Planet’, aims to engage the whole country in the conversation around climate change in the run up to the COP26 summit. It will raise awareness of climate issues and lay foundations for supporting sustainable behaviours long-term by driving awareness, building credibility and creating a launchpad for a 23. We will work closely with young people, schools, civil society groups, businesses and people across the UK to unite a broad spectrum of voices as part of our conversation on tackling climate change, creating momentum and engaging a diverse audience—including those who are harder to reach. 24. Our 26 One Step Greener champions will also show how taking one step can have a positive impact on the environment, encouraging the general public to also do their bit, however large or small. We will work across government and with our commercial partners to encourage and promote the One Step Greener initiative—creating a mass movement of green steps across the country in the lead up to COP26. Fifth Special Report of Session 2021–22 25. We are also working with small businesses across the UK to support their journey towards becoming greener and more sustainable. By November we want as many small businesses as possible to pledge to go One Step Greener and sign up to the globally recognised SME Climate Commitment, which helps organisations become more energy efficient, switch to electric vehicles and active travel, and become landfill free. By doing so, they can protect the planet and their business, and help us start a green business revolution. 26. On giving people a say in shaping future policies, deliberative processes, such as the Climate Assembly UK, are an important part of the evidence base that needs to be considered alongside other research to develop policies for reaching net zero that are feasible and equitable. These initiatives are also important in helping people to appreciate the challenges of getting to net zero and giving people a say in shaping the future policies 27. Government has been funding and running public workshops and deliberative dialogues for many years, in order to understand the public’s views and let these shape policies on climate change and the environment. Through the UKRI’s Sciencewise programme, we have funded over 60 deliberative dialogues on science and technology over the last 15 years.
Since 2019, we have run/funded or are still running 13 deliberative dialogues on a range of net zero issues such as net zero, homes, heating, transport decarbonisation, green savings, hydrogen, food, Carbon Capture Use and Storage (CCUS), Advanced Nuclear Technologies (ANT), energy, and the environment. 28. Specifically on net zero, in autumn 2020, BEIS invited a diverse group of 93 members of the public to join deliberative dialogues on net zero, to get an insight into their understanding and views of net zero, their perceptions on what role the public should play in reaching net zero and how we can best bring the public along with us. The findings of these dialogues will be considered as we develop our plans for reaching net zero emissions 29. Since July 2020, the Department for Digital, Culture, Media and Sport have also been supporting a government consultation tool for young people under 25, managed by the British Youth Council. ‘‘Involved’ is an Instagram page that invites young people from across the country to share their views on key issues with the Government by asking questions through the app’s polling and stories functions. Responses feed directly into live public consultations and wider policy making across government departments. 30. Inclusive public engagement that gives representation to different groups’ diverse needs and interests, as well as their meaningful participation in decision-making, is vital to inform the design and implementation of successful net zero policies. Our aim is that net zero policies are inclusive, have public support and fairly distribute the costs and the benefits of the transition across society. 31. BEIS has commissioned a project which is exploring how the UK can reach net zero in a fair, socially inclusive way. This is being led by the Carbon Trust in collaboration with leading professors in this area. A key part of this will be advice and recommendations on how we best ensure that vulnerable and underrepresented groups have their voices heard. 32. We are disappointed that the Minister has rowed back on the commitment given to us in oral evidence that the Government would provide a comprehensive and point-by- point response to the recommendations in CAUK’s ambitious report. We do not consider

Fifth Special Report of Session 2021–22 the Government’s submission and the Minister’s oral evidence to this Committee as being sufficient in this regard and ask the Minister to honour her commitment to provide a full response. (Paragraph 38) 33. We recommend that the Government publish a comprehensive, point-by-point response to the CAUK’s report. This would provide clarity on how the Government has engaged with the report. (Paragraph 39) 34. This point-by-point response to Climate Assembly UK’s recommendations should provide a full assessment of which recommendations will be accepted in full or in part and which will be rejected, along with an explanation for why the recommendation is being rejected. We expect this response to be published before the Assembly’s one- year anniversary in September and as part of the Government’s response to this report. 35. We take the views of the Climate Assembly UK seriously as assembly members represent viewpoints that broadly reflect the UK population and they have deliberated extensively on net zero. Findings from the Assembly form an important addition to the Government’s evidence base on assessing the UK public’s understanding, attitudes and 36. These recommendations are an important part of the evidence base that needs to be considered alongside other research to develop policies for reaching net zero that are feasible and equitable. This evidence base is being used in several ways, including to inform development of the Net Zero Strategy. For example, Government invited the Climate Assembly UK’s expert leads to present the recommendations via seven briefings for officials from across government, covering all the policy areas discussed in the report and attended by over 400 HMG officials. 37. Through the Government’s response to the Select Committee’s Call for Written Evidence and Oral Evidence, we gave a comprehensive view of the Climate Assembly’s work—annexed to this document. We responded to all the major areas of the Climate Assembly Report and the recommendations that received the greatest support from assembly members, providing our views on them and details of what Government is doing and has planned in those areas. Government will provide further details of what it has planned in the upcoming Net Zero Strategy, which will be released in due course. 38. The upcoming Net Zero Review is critical in ensuring fairness across society in the transition to net zero. This should be published as a matter of priority to maximise the time available, both, to consult and engage the public and businesses. We recommend that BEIS work closely with HM Treasury to ensure that the Net Zero Review be published as soon as possible, and at the very latest, alongside the Net Zero Strategy, expected in 39. The Net Zero Review is one step in the journey towards decarbonisation. It forms part of a cross-government effort to set the UK on a path to achieving net zero. Sectoral decarbonisation strategies already or shortly to be published also consider the distributional

Fifth Special Report of Session 2021–22 impacts of the transition to net zero and action the Government takes to ensure impacts are inclusive. The Net Zero Strategy will also set out further detail on specific policies and on the government’s vision for the transition. 40. We are considering both the benefits and the costs of different pathways for decarbonising the energy system holistically across Government. We remain committed to working with industry and consumers to keep costs down and identify how costs can be allocated in a way that incentivises user behaviour that drives decarbonisation. 41. The Net Zero Review final report will be published in due course, and in advance of COP26. The final report is an analytical report that uses existing data to explore the key issues and trade-offs as the UK decarbonises.
Against a backdrop of significant changes to the economy over the next 30 years, it will highlight the essential role of competitive markets in driving a low cost transition; discuss the importance of innovation and maintaining technology optionality over this decade; and, focus on the potential exposure of households and sectors to the transition, highlighting factors to be taken into account in designing policy that will allocate costs during the transition. It follows on from the interim report published in December 2020 and sets out the key findings from the research and analysis carried out as part of the Net Zero Review. 42. BEIS has also commissioned a project which is exploring how the UK can reach net zero in a fair, socially inclusive way. This is being led by the Carbon Trust in collaboration with leading professors in this area. A key part of this will be advice and recommendations on how we best ensure that vulnerable and underrepresented groups have their voices 43. The Government must ensure that the rationale behind the route to net zero is made clear and is transparent. This is key to earning the trust of both business and citizens, which would, in turn incite positive action across the population. We recommend that the Net Zero Strategy include specific timelines for the implementation of specific policies through to 2050 in order to prepare business, supply chains, and citizens for the changes that will come with achieving net zero. Where there is uncertainty in relation to the implementation of future policies, the Government should provide the dates by which decisions must be made. (Paragraph 51) 44. Achieving our net zero target will be a shared endeavour, requiring action from everyone in society—people, businesses, and governments. The UK’s ambitious targets helps to send a clear signal to businesses, investors and citizens on our efforts to 45. We are bringing forward clear proposals to set out how we will deliver on these targets through strategies for key sectors of the economy and through the Prime Minister’s Ten Point Plan. These plans include dates for key changes, from the ambition of four industrial carbon capture and storage clusters by 2030, to ending the sale of new petrol and diesel cars and vans by 2030. 46. Building on this, ahead of COP26, our Net Zero Strategy will set out the government’s plan for transitioning to net zero by 2050. Our path to net zero will need to ensure we plan for decisive action where we know it is needed, while maintaining the flexibility to make strategic decisions, and to respond to new opportunities and challenges which arise from

Fifth Special Report of Session 2021–22 47. The Government must also re-double its efforts to lead a joined-up approach to net zero with local authorities, business and citizens. Central to this is improved, co- ordinated policymaking across Whitehall. The inadequacy of cross departmental coordination across Whitehall in delivering net zero has been brought into sharp focus in the context of the UK’s Presidency of COP26, and increased focus on and scrutiny of Government policy and activity in the run up to the conference itself in November 2021. Cross-departmental co-ordination will be the focus of our new inquiry into Net Zero 48. Placing climate at the centre of government decision-making is vital to ensuring the UK remains on track to achieving net zero emissions. The Government is aiming to take a whole systems approach to reaching net zero by 2050. This means considering policy areas and economic sectors as parts of an interconnected system, where changes to one area directly or indirectly impact others. 49. BEIS has established robust governance structures, including a team dedicated to Net Zero governance, and works closely with Cabinet Office and the centre of Government on the net zero agenda to ensure that net zero is factored into key policy decisions and future 50. Our governance is a critical way that we understand the links between net zero and other priorities. In the last two years, the Government has made important commitments to significantly strengthen the governance around net zero. Two Cabinet committees were established in 2020 to rationalise climate governance and put the climate at the heart of government decision-making. This is driven first and foremost by the Prime Minister, who chairs the Climate Action Strategy Committee (CAS)—the body responsible for the UK’s overarching climate strategy. There is also the Climate Action Implementation Committee which is chaired by the COP President Designate and supports the CAS by driving forward delivery of key decisions and implementation of this strategy. 51. The NAO published a review of how Government is delivering net zero in December 2020. It acknowledges that there has been significant progress on governance and other internal Government process—and that this reflects the high priority that is given to Net