As part of our new partnership with the EU, we are currently negotiating an agreement to link emission trading schemes. This will lower costs for businesses and consumers, and, alongside the food and drink deal mentioned previously, add £9 billion a year to our economy. My right hon. Friend the Minister for the Cabinet Office speaks regularly with Commissioner Šefčovič on this, and we will keep the House updated on progress.
The EU’s carbon budget amendment mechanism came into being on 1 January. It affects the IFA2 interconnector between Britain and France, which I visited recently. CBAM is a trade block for UK electricity exports to the EU, imposing costs on exporters of £2.2 billion, and it robs the Treasury of up to £8 billion at a time when we need that money to invest in our public services and to have a stronger buffer against external shocks. Does the Minister agree that we should not be shooting ourselves in the foot and throwing away money, as the Conservatives would do, and that we should instead be boosting trade, boosting energy security, boosting our national security and seeking an exemption from CBAM?
Absolutely; I could not agree more. At the heart of the negotiation on which my right hon. Friend the Minister for the Cabinet Office is leading is how we reduce bills, ease the route to decarbonisation and reduce our reliance on volatile fossil fuel markets, which, as we have seen in the last week, is not just a national security issue but a cost of living issue. That is why we are working so hard on it, and why such work is broadly welcomed by so many businesses.