Lord McInnes of Kilwinning
That an humble Address be presented to His Majesty as follows:
“Most Gracious Sovereign—We, Your Majesty’s most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament”.
The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)
My Lords, on behalf of your Lordships’ House, I thank the King for delivering the gracious Speech. I am grateful for the privilege of opening today’s debate on the Motion for an humble Address.
Today, I shall outline the Government’s plans to grow the economy, to secure our energy supply for the long term, to deliver a world-class transport network for the whole of the UK, and to protect our environment. My noble friend Lady Penn will close what I am sure will be yet another spirited debate, with many important contributions from all parts of the House. My right honourable friend the Chancellor of the Exchequer will present the Autumn Statement to Parliament on 22 November. Your Lordships will be unsurprised to know that I will not pre-empt any of his announcements or the OBR’s forecast but will focus on the Government’s recent record on the economy.
Despite enormous global challenges, the UK is proving the doubters wrong. The Government have made difficult long-term decisions to restore stability and grow the economy. The best tax cut for the UK public is indeed a cut in inflation. Inflation has already fallen to 6.7% since peaking at 11.1%, and most major forecasters agree that we are on track to meet our goal of halving inflation by the end of the year, before returning it to 2% by 2025. This will enable us to create better-paid jobs and opportunities across the whole of our United Kingdom, guaranteeing a better future for the next generation.
To deliver that growth, we are creating the right environment for businesses to invest and expand. We have announced a £27 billion tax cut for business, and the UK now has the lowest corporation tax rate in the G7, as well as one of the most generous capital allowance regimes in the whole of the OECD. Our labour market reforms will also add 110,000 people to the workforce, and our extended 30 hours free childcare reforms will help to support even more people into the workplace.
At the same time, we remain on track to reduce the national debt. The independent OBR confirmed in March that debt will be falling by the end of the forecast. Reducing debt provides the essential foundations for sustainable growth, as it reduces spending on debt interest that could otherwise support essential public services. It also allows the Government space to respond to future shocks and reduces the financial pressure passed on to our children and grandchildren.
We recognise the immense challenges that British people have been facing with the cost of living. Putin’s war in Ukraine caused global economic disruption and unleashed huge energy price increases, leading to pressures on living standards. We have taken significant action over the past year to give struggling families the support they desperately need. We stepped in last winter to protect communities and businesses, spending £40 billion to help pay half the average household energy bill. Although energy prices have been steadily coming down since, we are continuing to offer support, with a £900 cost of living payment going to those on means-tested benefits. Taken together, our support to households to help with higher bills is worth £94 billion, or £3,300 per household on average, across 2022-23 and 2023-24—one of the largest household support packages in the whole of Europe.
We cannot thrive as a country without affordable, reliable and abundant energy. As we steadily transition to a net-zero economy, this Government recognise the huge role that home-produced renewables and nuclear power will play, alongside North Sea oil and gas. Our commitment to investing in the UK’s energy infrastructure will help to unlock private investment, scaling up green jobs and growth across the country.
The Offshore Petroleum Licensing Bill will make the UK more energy independent by increasing investor and industry confidence with regular oil and gas licensing. The Bill’s emissions tests will ensure that future licensing supports our transition to net zero. It will enhance the UK’s energy security and reduce dependence on imports with higher emissions intensity. It will protect our domestic oil and gas industry, which supports more than 200,000 jobs, as we grow the UK economy and realise our net-zero target in a proportionate and realistic way.
This country has led the world on tackling carbon emissions, and we will continue to do so. Of all the major economies, we have set the deepest cuts in emissions for 2030, and we have so far exceeded all our targets, including cutting our emissions by almost half over the past 30 years and boosting our share of renewables from 7% in 2010 to over 40% today. To realise our ambitions, we have to take a pragmatic approach, taking consumers and industry with us; we cannot impose unaffordable, extra costs on households, particularly when millions of families are struggling with the cost of living.
By that same token, we are working with Ofgem and suppliers to reform markets so that they work for consumers more effectively and are fit for the future. I outlined a few moments ago the immediate support being offered directly to households by the Government, but we also want to ensure that customers get the service they deserve and that vulnerable customers are prioritised and protected.
We also want a fair approach to decarbonising how we heat our homes. We are already investing £12 billion in energy efficiency and clean heat this Parliament, and we have seen the share of homes in the highest energy efficiency bands rise from 14% in 2010 to around 50% today. We recognise that we need to support people to make these changes, so, in addition to financial support, we are giving people more time and support to make the necessary changes in their own homes.
Our energy transition plans have enormous potential to deliver economic prosperity across the country, as well as the security that comes from being able to power Britain from Britain. Green investment is a top priority, and we are doubling down on sectors with the greatest opportunities, such as carbon capture and storage, offshore wind, and solar and fusion energy.
Britain’s nuclear revival is well under way too, with Hinkley Point C and Sizewell C set to power 12 million homes. We have launched Great British Nuclear to deliver our pipeline of resilient projects, while accelerating the development of small modular reactors.
However, despite the billions being invested in new energy projects, we do not yet have the grid infrastructure to bring that energy to households and businesses. So we are building new transmission infrastructure and speeding up connections to the grid. We will set out the UK’s first ever spatial plan for infrastructure to give industry more certainty, and we will fast-track plans for the most nationally significant projects.
I move on to transport. Responsible government is about making the tough, long-term decisions to secure a brighter future. It is why we have scaled back our plans for HS2—a project that saw its costs double, its business case weaken and its completion date repeatedly delayed. Rather than focus on a rail line between Birmingham and Manchester, we are prioritising the millions of everyday journeys that matter most to the British public.
By stopping HS2 in the West Midlands, we will reinvest every penny of the £36 billion saved into better bus services, faster regional train links, new road schemes and pothole-free streets. Network North will see more places and more people benefit more quickly, thanks to the choices that we have made.
Now, with work already under way, we will complete HS2 between Euston and Birmingham. It remains a ground-breaking infrastructure project—indeed, one of the biggest in the country. Talks are already under way on the huge regeneration opportunity at Euston, which could potentially see 10,000 homes built.
While the packed parliamentary timetable has prevented us from introducing legislation in this Session, we will bring forward the rail reform Bill for pre-legislative scrutiny, alongside the benefits that we are already delivering in areas such as ticketing, private sector innovation and better contracts for operators.
Moving away from rail, the Government have been clear that the war on motorists must end. For many, cars are a lifeline, not a luxury. Yet, across the country, drivers face overzealous enforcement measures and a variety of restrictions which clearly do not have public support. In our capital, thanks to the newly expanded ULEZ scheme, hard-working families must now decide to either pay up or sell up. The Government are on the side of motorists, and the 30 measures in our Plan for Drivers will ensure that people can travel where, when and how they wish.
Looking to the future, we remain committed to seeing more zero-emission vehicles on Britain’s roads. However, that transition should be proportionate and, wherever possible, we should ease the burden on working families. That is why we have extended the period in which you can buy new petrol and diesel cars by five years, ensuring more time for zero-emission vehicle prices to fall and the used market to grow. However, our overall ambition remains the same. We will ban the sale of new polluting vehicles by 2035 and, to give manufacturers certainty, our zero-emission vehicle mandate, which kicks in from next year, will set minimum targets for clean car production.
Automated vehicles will also be part of our future. We want to position Britain as the global leader of a sector that could be worth up to £42 billion by 2035, with 38,000 jobs at stake. So, in this parliamentary Session, we will bring forward the Automated Vehicles Bill, enabling the safe deployment of self-driving vehicles.
We will also—I know this will have particular support in this House—bring London’s pedicabs under the letter of the law.The Pedicabs (London) Bill will give Transport for London powers to regulate the city’s pedicab industry, reassuring passengers and road users that those vehicles and operators are properly licensed and accountable.
I move on to discuss the environment. The Government are committed to leaving the environment in a better state than we found it. On 31 January 2023, Defra published a revised Environmental Improvement Plan. This sets out how we will deliver our long-term Environment Act targets, matched with interim targets to measure progress over the shorter term.
With respect to air quality, in addition to our existing emissions and concentrations targets we have set two new targets for fine particulate matter, the pollutant most damaging to human health, under the Environment Act 2021. We are also enhancing protected landscape management plans through the Levelling-up and Regeneration Act and are placing a stronger requirement on partners to contribute to their delivery.
On green finance, we published a cross-government green finance strategy and a nature markets framework in March 2023, setting out the action we are taking to support a transition to a net-zero, climate-resilient, nature-positive economy. On climate change, Defra published the Third National Adaptation Programme in July this year. This sets out a programme of action for the next five years to respond to a range of climate risks facing the United Kingdom.
I am also delighted that we are introducing the animal welfare (livestock exports) Bill to Parliament. Animal welfare is a priority for the Government, and we have some of the highest standards in the world. Thanks to our actions, the UK is building on our reputation as a world leader on animal welfare: we are joint top of World Animal Protection’s animal protection index.
Since the publication of Our Action Plan for Animal Welfare in 2021, we have delivered on a range of key manifesto commitments. We have increased the penalties for those convicted of animal cruelty, passed the Animal Welfare (Sentience) Act 2022 and launched the Animal Sentience Committee. We have made cat microchipping compulsory and have announced the extension of the Ivory Act 2018 to cover five endangered species: hippopotamus, narwhal, killer whale, sperm whale and walrus.
Now that we have left the European Union, we can fulfil our manifesto commitment to end excessively long journeys for slaughter and fattening. The animal welfare (livestock exports) Bill will ban the export from Great Britain of cattle, sheep, goats, pigs and horses for slaughter and fattening, stopping the unnecessary stress, exhaustion and injury caused by the export of live animals.
This Government have extensive and comprehensive plans to deliver a strong economy, a secure energy supply, a state-of-the-art transport sector and a safeguarded environment, laying the foundations for a more secure, resilient and prosperous country.
Baroness Hayman of Ullock (Lab)
My Lords, I congratulate the noble Lord, Lord Gascoigne, and the right reverend Prelate the Bishop of Norwich on their maiden speeches in today’s wide-ranging debate. I am very pleased that there is another advocate for the north of England, so I offer the noble Lord the warmest welcome to the House. As someone who also feels passionately about our environment, I warmly welcome the commitment to it of the right reverend Prelate. I look forward to further contributions from them both.
My noble friend Lord Livermore clearly laid out our concerns about the current state of the economy, which have been reiterated by many noble Lords in today’s debate, including my noble friends Lady Drake, Lady Liddell, Lord Mandelson, Lord Sikka, Lord Hain, Lord McNicol, Lord Liddle and so on. My noble friend Lord Livermore spelled out Labour’s very different approach to turning around the economy and tackling the cost of living crisis, so I will concentrate my remarks on other aspects of the debate.
We are just weeks away from the UN climate summit, COP 28. With this in mind— and considering that the Government have time and again spoken up about their green credentials—the opportunity to use the King’s Speech to set out a clear vision for a greener future has been squandered. Instead, with one of the lightest legislative programmes in a decade, the Government have missed a vital opportunity to set out a positive agenda that delivers for people and the planet. Vague commitments to “lead action on tackling climate change and biodiversity loss, to support developing countries with their energy transition and hold other countries to account on their environmental commitments” are simply not good enough. It seems a little bit rich of the Government to pronounce that they will hold other Governments to account on environmental commitments when they are not exactly managing their own terribly well.
As we have heard today, there are huge health impacts from climate change and biodiversity loss. Does the Minister not agree with the WHO that:
“Further delay in tackling climate change will increase health risks, undermine decades of improvements in global health, and contravene our collective commitments to ensure the human right to health for all”?
My noble friend Lord Davies mentioned the lack of a mental health Bill—another thing missing in our approach to health.
The King’s Speech is a missed opportunity for nature’s recovery. Some noble Lords talked about peatlands, which are our largest natural carbon stores. They help to reduce flood risk, produce clean water and provide homes for many important species. The noble Baroness, Lady Sheehan, mentioned this in much more detail and the fact that the Government are still to ban retail sales of peat-based compost, as they promised to do by 2024.
We also heard about some of the direct and indirect impacts of climate change and biodiversity loss. The right reverend Prelate the Bishop of St Albans, for example, talked about the need to ensure that the impact on the environment is considered right across our political agenda. The noble Baroness, Lady McIntosh of Pickering, and my noble friend Lady Ritchie of Downpatrick talked about flooding and the lack of action on flooding. In government, Labour would set up a flood resilience task force to make sure there is better co-ordination between national and local government in emergency services and to give communities and local economies far better protection against flood damage. We would also appoint a Minister for Resilience within the Cabinet Office and overhaul local resilience forums, so that they are more ready to respond to emergencies such as floods.
Air quality was mentioned by a number of noble Lords. We know about the impact on health of poor air quality, and the Government simply do not have ambition on this. Food and farming, higher temperatures, changing rain patterns and extreme weather—all affect global food security. The United Kingdom Food Security Report 2021 says that climate and biodiversity loss are significant risks to domestic food production. With half of UK food imported from overseas, worsening climate impacts could lead to food shortages and price rises, which we have already been seeing. What exactly is the Government’s plan to tackle this?
We also know of indirect impacts from the current situation on climate change and our economy, such as increased poverty, migration and intensified inequalities. My noble friend Lord Hendy talked about this, as did the right reverend Prelate the Bishop of Durham.
My noble friend Lord Whitty pointed out that there is nothing about water in the Speech. Nothing more graphically illustrates the 13 years of failed Conservative government than the tide of raw sewage that today spills down our rivers and into our lakes and washes up on our beaches. The noble Duke, the Duke of Wellington, spoke about this and the failure of our regulators to do something to tackle it. The Government must take responsibility for cutting back on the enforcement and monitoring of water companies and for the poor rate of prosecutions when the law is blatantly broken.
We believe that the regulatory framework is simply not working effectively and needs changing. We would ensure that the polluter pays by expanding Ofwat’s powers to ban the payment of bonuses to water bosses until they have cleaned up their filth. We would make law-breaking bosses personally and criminally liable for their crimes, we would make monitoring of every water outlet compulsory and we would introduce automatic, instant severe fines for every illegal sewage dump.
Energy has been much discussed in this debate. A number of noble Lords talked about the Offshore Petroleum Licensing Bill. For example, my noble friend Lady Liddell clearly laid out Labour’s position on this, the noble Baroness, Lady Hayman, drew attention to the tax incentives that favour fossil fuels over renewables and my noble friend Lady Whitaker spoke of the need to move away from fossil fuels. We need an energy policy that delivers clean power, increases Britain’s energy independence and reduces our reliance on oil and gas derived from the North Sea. The importance of investment in nuclear was mentioned, in particular by the noble Lord, Lord Ravensdale, and the noble Baroness, Lady Bloomfield.
However, as my noble friend Lady Blake said, it is hugely concerning that clean energy generation and security have not been a priority. Instead, we have recently seen a number of announcements that instead delay important net-zero policies. Unfortunately, it still seems easier to get permission from the Government to build a new coal mine rather than build the renewable energy that we so desperately need. Although the Speech included broad commitments to seek to attract record levels of investment in renewable energy sources and to reform grid connections, we need specific policies to be set out in the Autumn Statement at the end of November so that we know what this actually means. Can the Minister confirm that we will have more detail shortly?
As we have heard, the problem facing the UK is not just one of energy supply but one of energy affordability. Energy bills are still rising. My noble friend Lord Lennie spoke about energy security and the high cost to consumers, and the lack of action and ambition on this. We now know that an estimated 6 million households are in fuel poverty. The King’s Speech offers no hope to families living in poverty, struggling to heat their homes this winter.
There were also a number of expected Bills that simply did not make an appearance. My noble friend Lord Livermore mentioned a number of these, so I wonder whether the Minister knows if we are likely to see them at all in the near future. One example is the expected transport Bill, which a number of noble Lords mentioned. In December 2022, the Transport Secretary. Mark Harper, told the House of Commons Transport Committee that, due to a lack of parliamentary time, the Government had not been able to put it forward just yet but that some of the measures might well be included in the 2023 King’s Speech. What exactly has happened to these promised regulations?
The Speech did not include measures to limit the powers of local authorities to make it more difficult to introduce policies such as ultra-low emission zones or 20 mph speed limits. Have the Government changed their mind on this?
A number of noble Lords also referred to HS2, including the noble Lord, Lord Birt, and my noble friends Lord Grocott and Lord Berkeley. How will the rail reform Bill tackle the big issue of capacity now that the Government have cancelled HS2 north of Birmingham, without any sign of any suitable alternatives? Rail infrastructure is vital for economic growth, connectivity and investment, as we have heard. We have heard about the Network North proposals and promises, particularly from my noble friend Lord Grocott. We also heard more broadly from my noble friend Lord Faulkner about the need for proper rail infrastructure in this country, and my noble friend Lord Jones talked about the importance of funding investment for Welsh rail. The north really needs a rail Bill that delivers, so what guarantees can the Minister give me on this?
Finally, let us end on a positive note on animal welfare. I am sure noble Lords who know me will not be at all surprised to hear how absolutely delighted I am with the inclusion of a Bill to end the live export of animals. However, despite the noble Lord, Lord Callanan, saying that animal welfare is a priority for the Government, my welcome is tinged with a touch of cynicism after what happened to animal welfare announcements in previous Queen’s Speeches.
Baroness Hayman of Ullock (Lab)
The kept animals Bill and the animals abroad Bill were in Queen’s Speeches. What has happened to the promised bans on the importation of fur and foie gras, for example? What will happen with the trophy hunting import Bill that just collapsed? How can the Minister guarantee that the Government will actually deliver the promised legislation this time, and what is happening about the outstanding pledges?
It is a bit depressing that this legislative programme is the best the Government could come up with. I gently suggest to them that it is, in fact, time for a change.
The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
My Lords, I add my words of welcome to the right reverend Prelate the Bishop of Norwich and my noble friend Lord Gascoigne and congratulate them both on their maiden speeches. I am sure that they will prove to be valuable Members of this House. The noble Baroness, Lady Hoey, put it well when she described my noble friend Lord Gascoigne as “discreet and decent”. I have always enjoyed working with him over many years in the past, and I look forward to working with him in the future. I also welcome back my noble friend Lord Wakeham to this House, and also welcome the optimism that he brought in his remarks about the opportunities of the future.
Much of today’s debate has focused on the Government’s record on the economy and our plans to grow it in future, so I thought it worth taking some time to go over the facts. Since 2010 the UK economy has grown by more than 24%, faster than France, Germany, Japan, Italy, Spain, Austria, Finland, Belgium, Portugal, and the Netherlands. At the same time, borrowing is forecast to have fallen by 4.7 percentage points, more than that of any other G7 member. We have halved unemployment and cut inequality, and reduced the number of workless households by 1 million. In fact, since 2010, 4 million more people are now in work, with more than 1 million new businesses created.
Increases in tax thresholds made by successive Chancellors mean that people in our country can earn £1,000 a month without paying a penny of tax or national insurance. At the same time, educational outcomes have consistently improved. All this has been delivered while we have cut our carbon emissions by more than 48% between 1990 and 2021, delivering net zero faster than any other major economy.
We also have a bright future ahead of us. We are ranked number one by the World Bank among major European economies as a place to do business. We are home to Europe’s largest life sciences sector, which helped produce a Covid vaccine that saved 6 million lives and a treatment that saved 1 million more. We are only the third country in the world to have developed a trillion-dollar tech economy. Our film and TV industries are the largest in Europe, and our creative industries are growing at twice the rate of the rest of the economy. We are a world leader in offshore wind, behind only China in the scale of energy production.
But we are not complacent, not least because of the unprecedented shocks our country and economy have faced in recent years. The Covid pandemic forced us to take decisions to shut down large swathes of our economy and made huge demands of our public services, as the NHS went on to a war footing, and teachers and families had to adapt to moving learning for millions of children online and at home. The Government also stepped forward with unprecedented support totalling more than £350 billion during that period. The furlough scheme protected 11.7 million jobs and livelihoods. Our loan support schemes provided lifelines to 1.6 million businesses, as well as cutting VAT for the worst affected, providing a business rates holiday for more than 750,000 businesses, and protecting our arts and cultural sectors through the nearly £2 billion culture recovery fund. We supported our public transport systems with more than £12.8 billion of funding, our NHS with £81 billion of Covid ring-fenced spending, and our schools with nearly £5 billion towards educational recovery since the 2020-21 academic year.
In 2022 we emerged from the pandemic earlier than many other countries thanks to our vaccine rollout, and our economy grew at the fastest rate of any G7 nation. But in March of that year, we faced a further global shock after Russia’s illegal invasion of Ukraine. Energy prices shot up, adding to inflationary pressures caused by global supply chains needing to rebuild after Covid. The noble Lord, Lord Livermore, sought to lay the blame for inflation and therefore higher interest rates at the Government’s door. However, given his emphasis on Labour’s respect for the independent Bank of England, perhaps he will defer to its analysis from the August Monetary Policy Report this year, which explained:
“High inflation has been caused by a series of big shocks. The first shock was the Covid pandemic … The second shock was Russia’s invasion of Ukraine … The third shock was a big fall in the number of people available to work”.
In May the IMF confirmed that we have taken “decisive and responsible” action to bear down on inflation and achieve the right balance of fiscal and monetary response, while also focusing on growing the economy.
The noble Baronesses, Lady Sheehan and Lady Bakewell, asked what the King’s Speech is doing to support households with this higher cost of living, but they neglected to recognise the significant ongoing support already in place. Over the past year, government support paid for about half the average household energy bill and provided one of the largest household support packages in Europe. We extended the temporary 5p fuel duty cut and a freeze to fuel duty representing a saving for the average driver of £200 since the record 5p cut was introduced.
I reassure the right reverend Prelate the Bishop of Durham that we have targeted our support at the most vulnerable, with cost of living payments to more than 8 million households on means-tested benefits and 8 million pensioner households, and to 6 million people on disability benefits, worth respectively £900, £300 and £150 this year on top of payments of £650, £300 and £150 last year. This is in addition to uprating benefits by 10.1% this year in line with inflation and protecting the triple lock for around 12 million pensioners, worth £11 billion.
My right honourable friend the Chancellor confirmed that the UK Government will accept the Low Pay Commission’s forthcoming recommendation on the increase in the national living wage from April 2024, currently forecast to increase to at least £11 an hour. This means that the annual earnings of a full-time worker on the national living wage will increase by more than £1,000 next year.
There is no doubt that we have faced real challenges over the past few years, but this Government have stood by the British people every step of the way. When we look ahead, the Prime Minister has set three clear priorities for the economy to ensure that we recover from the shocks we have faced and once again release the potential of this great nation. First and foremost, we remain steadfast in our commitment to cutting inflation, the most insidious tax on household budgets there is. We are on track to deliver our aim to halve inflation this year as a staging post to returning to the 2% target, and decisions by the Bank of England’s independent Monetary Policy Committee remain the primary tool for controlling inflation.
It is also essential that fiscal policy acts in support of, rather than working against, monetary policy. That is why the measures taken by the Chancellor at this year’s Budget were focused on easing some of the longer-term drivers of inflation. Indeed, the reforms announced at the Budget were the largest supply-side measures ever scored by the OBR.
We have also taken the difficult but necessary decisions needed to control public sector borrowing. Additional borrowing would increase aggregate demand and place further pressure on inflation and interest rates. The noble Lord, Lord Leong, asked about the current level of government debt and the cost of servicing it. Government debt currently stands at £2,702 billion, and the OBR March forecast put debt interest costs at £94 billion this financial year. This figure puts into stark relief the challenge before us, set out so ably by my noble friend Lord Bridges. I say to my noble friend that, while it was absolutely right for the Government to step in in response to Covid and the energy price shock, an ever-growing state cannot be the new norm, particularly in a future where we know there will be growing demands on the state, whether it is to support the energy transition or to harness and respond to the technological revolution—challenges to future global growth so eloquently set out by my noble friend Lady Moyo. As my noble friend Lord Bridges said, the future will demand clear choices from government about what it can and should do and a relentless focus on productivity in the public sector and, as noted by the noble Lord, Lord Londesborough, in the private sector.
I reassure noble Lords that these themes and concerns drive this Government forward. In contrast, despite the valiant attempt by the noble Lord, Lord Livermore, to reassure noble Lords of Labour’s commitment to fiscal responsibility, despite its record in government, he failed to explain how Labour’s plans to spend £28 billion extra every year could be paid for without additional tax hikes or adding to this borrowing burden.
Getting debt falling is essential in ensuring that we do not pass on the burden to future generations who would have to pay it off. It provides space to allow government to respond to future shocks and reduces spending on debt interest that could otherwise support public services—or, in response to my noble friend Lady Noakes, put money back into people’s and businesses’ pockets through cutting their tax burden. As an aside to my noble friend Lord Balfe, I reassure him that we have delivered on George Osborne’s commitment to cut inheritance tax.
In its latest forecast, the OBR confirmed that the Government are on track to deliver their debt target. However, challenges remain: borrowing and debt are high by historical standards, and the headroom to debt falling is historically low. Controlling inflation and getting debt falling provide the foundations for our third priority: long-term, sustainable growth. Growth is the key to building confidence, security and hope for the future. It rewards aspiration and invention, creates freedom and choice, and strengthens our communities and our country. As my noble friend Lord Forsyth put it, it is the prerequisite for any action by government to support vulnerable households and essential public services.
The Spring Budget set out an ambitious programme of measures to drive economic growth across employment, enterprise, education, and everywhere in the UK, without irresponsibly fuelling inflation. We will look to build on this further at the Autumn Statement; I hope the noble Lord, Lord Desai, will forgive me if I do not pre-empt that today. The Budget package included a landmark childcare offer, and key new policies to ensure the UK business tax system is one of the most comprehensive of the world’s major economies.
In today’s debate we have focused on a number of other important areas driving our future growth. One has been the role of technology, in particular AI, as raised by the noble Baroness, Lady O’Grady, my noble friend Lady Moyo and the right reverend Prelate the Bishop of Oxford. The AI Safety Summit was an important step forward to deploying this crucial technology with the launch of the world’s first AI safety institute, which will help spur international collaboration on the safe development of AI.
The noble Baroness, Lady O’Grady, also called for more effective digital competition policy. That is exactly what the Digital Markets, Competition and Consumers Bill is designed to address, providing new powers to the Digital Markets Unit in the CMA and building on the Online Safety Act, creating a modern regulatory framework for online platforms and tech companies.
My noble friends Lord Altrincham and Lord Trenchard raised the potential of our financial services sector, and the noble Baroness, Lady Drake, and the noble Lord, Lord Davies of Brixton, touched on pension reforms. Both these areas have significant potential to unlock further investment in the UK. The Government will continue to pursue reform at pace, with appropriate safeguards.
The Government’s economic priorities have also driven our approach to delivering on net zero. Since March 2021, the Government have committed a total of £30 billion of domestic investment to the green industrial revolution. Since then, the Government have announced an additional £12 billion for energy efficiency and low-carbon heating to support the work we are doing to reduce the UK’s energy consumption from buildings and industry by 15% by 2030 relative to 2021 levels. We have also announced up to £20 billion for early deployment of carbon capture, utilisation and storage in the UK. In response to the noble Baroness, Lady Liddell, we are currently working with industry on the right quantum of spend within a given period. These are commercial negotiations, the outcomes of which we will announce at the next spending review and future spending reviews, to ensure that the UK remains at the forefront of deploying this technology.
The policies set out in the Net Zero Strategy 2021 and the Net Zero Growth Plan 2023 are expected to mobilise an additional £100 billion of private investment and support 480,000 jobs across the UK. But we know there is more to be done, so we are doubling down on tackling the most significant constraints to our transition —accelerating grid connections, addressing issues with planning and improving auction rounds for renewable power, as well as investing in UK green R&D.
At the same time we are investing in our energy security and making sure that we smooth the transition for households in a pragmatic way. The impacts of Putin’s war in Ukraine have made clear the need for greater energy security in the UK and Europe, which can be secured only by boosting the range of domestic energy supplies that we have available.
Renewable power reached a record share of 48.2% of total generation in the first quarter of 2023. When you include nuclear, low-carbon sources provided over 60% of total generation. In future the UK will be powered by renewables including wind, solar and hydrogen power with carbon capture, usage and storage and new nuclear plants.
The noble Baroness, Lady Whitaker, asked about tidal and wave energy. The Government have invested over £175 million in wave and tidal stream innovation over the last two decades. The Government announced on 8 September that a record 11 tidal-stream contracts have been secured in the latest contract for difference, thanks in large part to a ring-fenced tidal budget. On wave energy, we continue to engage with domestic and European industry, academia and the devolved Governments, including collaborating with Wave Energy Scotland.
Baroness Whitaker (Lab)
I am sorry to hold up the Minister in her magnificent tour de force but I asked her a specific question about the consent process consultation. If she does not have the answer to hand on wave energy, would she please write to me?
Baroness Penn (Con)
I will be happy to write to the noble Baroness.
We have launched a nuclear revival. The Government invested to become a shareholder in Sizewell C in November 2022 and launched a capital raise process in September this year to bring in new project finance. We have launched Great British Nuclear to drive the delivery of new nuclear technologies beyond Sizewell and to develop the latest small modular reactor technologies, and last month we announced the shortlist of companies to build the new generation of small modular reactors. Beyond the initial focus on delivery, Great British Nuclear will be available to support further nuclear ambitions. It has the statutory backing and resources behind it to deliver against its long-term operational mandate.
Through the nuclear fuel fund we will invest over £35 million, match funded by industry, to develop new domestic fuel production capabilities and to supply gigawatt reactors, SMRs and AMRs. On siting, we are developing a nuclear national policy statement that will cover the policy framework for deploying new nuclear power stations beyond 2025. As an initial step, we plan to consult on our proposed approach for determining new nuclear sites by the end of this year, with our aim to finalise a consultation on the NPS next year and complete parliamentary scrutiny to enable its designation in 2025. We will launch our consultation on alternative routes to market next month and, following our review of responses, deliver a report in 2024. I hope that responds to the questions from both the noble Lord, Lord Ravensdale, and my noble friend Lady Bloomfield, who are both great advocates for the nuclear industry. Perhaps I can write to the noble Lord, Lord Jones, to respond to his specific questions about the two sites that he focused on in his contribution.
However, we also need to recognise that data published by the Climate Change Committee shows that the UK will continue to rely on oil and gas to meet its energy needs even after the UK reaches net zero in 2050. That will include the use of gas for power generation and carbon capture usage and storage. That is why we are investing in the range of domestic energy supplies that we have available, including taking steps to slow the decline in the domestic production of oil and gas, which will reduce our reliance on hostile states and back a thriving industry in the UK that supports 200,000 jobs. It is important to recognise that the UK is a rapidly declining producer of oil and gas, and new oil and gas licences will reduce the fall in UK supply to ensure vital energy security, rather than increasing it above current levels, so that the UK remains on track to meet its net-zero 2050 commitments.
I say to the noble Baroness, Lady Blake of Leeds, that we recognise the unprecedented profits made by oil and gas producers after Russia’s invasion of Ukraine. These profits represent not a return on investment but a windfall as a result of unprovoked war. It is therefore right that we introduced the energy profits levy on those windfall profits, bringing the tax rate on the profits of North Sea oil and gas producers to 75%. By 2027 the levy is expected to raise almost £26 billion, having already generated around £5.9 billion, helping us—as I said earlier—to pay half the typical household’s energy bill between October and June.
We also want to take a fair approach to decarbonising how we heat our homes, which is why we are giving people more time to make the necessary transition to heat pumps. We have increased the boiler upgrade scheme cash grants by 50%, to £7,500, to support consumers who want to make the transition now. It is one of the most generous grants in Europe.
I reassure noble Lords that, in taking into account the changes to the boiler and electric vehicles mandate and the ongoing licensing of domestic oil and gas reserves, we are confident that we can deliver our carbon budgets and capitalise on the opportunities for green growth. So I say to the many noble Lords who raised concerns in this area that we remain completely committed to our existing targets and to meeting net zero by 2050, compatible with the Paris Agreement ambition to limit global warming to 1.5 degrees.
We will continue to listen to and engage with the expertise in this House on climate and nature. I say to my noble friend Lord Lilley that our approach will be informed by evidence, pragmatism and rational debate. Our package of proposals and policies will continue to evolve to adapt to changing circumstances, to utilise technological developments and to address emerging challenges.
But we are in no doubt about the real and present threat that climate change and biodiversity loss represent to our economy and society, and there is no change in our commitment to tackling this challenge. The UK overachieved against its first and second carbon budgets, and the latest projections show that we are on track to meet the third. We are able to quantify the vast majority of carbon savings in the late 2030s, more than a decade away.
Environment and nature are the other side of the coin when it comes to tackling climate change. I reassure the right reverend Prelate the Bishop of Norwich, who spoke so eloquently of his own work on ecology, that not only have this Government done more than any other on the environment and nature—including through the landmark Environment Act—but we remain committed to going further, through our commitment to end the net loss of biodiversity in the UK by 2030. I agree with the noble Baroness, Lady Hoey, that we need to put people and rural communities at the heart of this approach. We will not achieve this transition without the support and action of farmers and land managers.
My noble friend Lady McIntosh asked about the live animal export Bill and whether there is a means to restrict live animal imports from the EU. I say to her that there has never been a significant import trade for slaughter or fattening. For example, since 2019, only 91 cattle, 14 sheep and 20 pigs have been imported for slaughter from mainland Europe—so we do not see a pressing case to take action in this area. On my noble friend’s question about border control points, I reassure her that our new border control point at Sevington, covering the short straits, opens in April. Other border control points will open around the UK, securing our biosecurity with our new border targeting operating model.
A number of noble Lords, including the right reverend Prelate the Bishop of St Edmundsbury and Ipswich, raised concerns about the impact of recent flooding on farmers. The flood recovery framework provides funding for households and businesses affected by severe flooding, and it includes several grants and business rates relief.
I say to the noble Baroness, Lady Ritchie of Downpatrick, that I know that my noble friend Lord Caine spent several hours with her in communities affected by the recent floods. In the absence of the Executive, who could have acted swiftly, the UK Government are making money available to support those affected by floods, through the reallocation of existing funding.
I say to the noble Lord, Lord Whitty, and the noble Duke, the Duke of Wellington, who, among others, raised the reform of water regulation, that we are driving the largest infrastructure investment in water company history—an estimated £60 billion of water company capital investment by 2050—to meet storm overflow discharge reduction plan targets, which were recently expanded to cover all storm overflows in England, including those discharging to coastal and estuarine waters. But I will of course pass on to Defra the proposal from the noble Duke for the future of regulation in this area.
This brings us on to the theme of what is not in the King’s Speech, and to speak to the concerns raised by the noble Baronesses, Lady Sheehan and Lady Bakewell, around the ending of peat in horticulture. It remains our policy that we intend to legislate to restrict and ultimately ban the sale of peat and peat-containing products. We appreciate that there is good support for this from the public and from within Parliament.
I turn to the noble Baroness, Lady Sheehan, and the right reverend Prelate the Bishop of St Albans, who raised the subject of disposable vapes. The Government launched a consultation on smoking and the use of vaping earlier this month. As part of it, the UK Government and the devolved Administrations are considering restrictions on the sale and supply of disposable vapes, including prohibiting the sale of these products due to the environmental impacts that they have.
The noble Lords, Lord Whitty and Lord Livermore, and many others raised the question of employment rights. I say to noble Lords that, over the past year, we have proven our commitment to supporting workers by introducing a number of new employment rights via government hand-out Bills, including a new day one right to request flexible working; a new legal right to request predictable working patterns; additional protections for pregnant women against redundancy; a right to paid leave for employees whose child is receiving neonatal care; and a right for unpaid carers to one week of additional unpaid leave. Action is being taken in that area.
Perhaps related is the question of unpaid Ministers in this House, as raised by my noble friend Lord Forsyth. I and my noble friend the Lord Privy Seal have heard my noble friend Lord Forsyth’s plea and impressed the point at the highest levels. However, as he is well aware, the number of Ministers who are paid is set out in legislation, and to improve the lot of our Ministers who are unpaid we would need to legislate. Unfortunately, there is not currently the appetite to do that.
I turn to the remarks by the noble Lord, Lord Snape, who questioned the inclusion of the Pedicabs (London) Bill in the King’s Speech—
Lord Forsyth of Drumlean (Con)
I am most grateful to my noble friend. I appreciate her courtesy in referring to what I said. As David Cameron is joining the House on a salary of £106,000, can we take it that his Minister of State will be paid?
Baroness Penn (Con)
My Lords, I could not possibly comment on that, but I join my noble friend in welcoming David Cameron to his new post. I think we will be very pleased to have someone of such talent and experience join your Lordships’ House.
To return to pedicabs, they are the only form of unregulated public transport on London’s roads. If we could deal with it through by-laws, that would be fantastic, but in fact it takes primary legislation to deal with that issue.
Many noble Lords, including the noble Lords, Lord Birt, Lord Grocott, and others, regretted the cancellation of High Speed 2 beyond Birmingham. We absolutely recognise the need better to support critical links between and within our cities and towns, but the reality is that High Speed 2 is crowding out investment to further these priorities elsewhere across the country. We have made the difficult decision not to extend High Speed 2 and, instead, to deliver the £36 billion of savings that we have allocated to Network North, an ambitious pipeline of alternative projects. The new plan will provide direct benefits to more people and more places and will do so more quickly than the previous plan for High Speed 2.
The noble Lord, Lord Birt, raised the need to upgrade the trans-Pennine rail route, which is absolutely a priority for this Government. The upgrade programme is expected to provide an extra two trains per hour and aims to reduce journey times between Manchester Victoria and Leeds from 55 to 41 minutes. The Government have committed £3 billion to date, and an announcement on future funding will be made later this year.
To the noble Lord, Lord Jones, I say that we are delivering a £1 billion upgrade to the north Wales main line, including electrification and improving journey times to better connect Wales with London and the north-west. We will now proceed with the steps necessary to implement this, including reflecting on the existing package of legislation before Parliament, necessary consultative steps, business case development, and our parliamentary and legal and fiscal duties.
Finally, the noble Baroness, Lady Bennett of Manor Castle, asked whether I stand behind the briefing that the first models of self-drive vehicles could be offered to market by 2026 if they are proved safe. The short answer, which at this time of the night will be appreciated by noble Lords, is yes.
So, this Government have a comprehensive plan to deliver a strong economy, secure energy supplies, a state-of-the-art transport sector and a safeguarded environment. From bringing down inflation and the national debt to growing the economy and tackling climate change, we are committed to making long-term decisions for the benefit of everyone across this United Kingdom. That is what the first King’s Speech in many a generation delivers, and I commend it to the House.