Royal Assent
Democracy and Unelected Strong Leaders
Lord Harries of Pentregarth
To ask His Majesty’s Government what is their response to the poll, published by FGS Global in January, which found that one in five people aged 18 to 45 in the United Kingdom prefer unelected strong leaders to democracy.
Baroness in Waiting/Government Whip (Baroness Anderson of Stoke-on-Trent) (Lab)
My Lords, before I start, as this is my lasting outing, I would like to wish everyone happy Easter and Pesach sameach for the imminent Recess.
Internationally, democracy is under attack. The Defending Democracy Taskforce brings a whole-of-government effort to defend against that threat and uphold the rule of law, but we must go further to restore trust in politics. That is why we have committed to a reset in public life, restoring a culture of service and deepening democracy through constitutional reform. Every political party has a role to play in this mission, and that includes every Member of your Lordships’ House. We all have a responsibility to cherish, defend and promote the core values of democracy.
Lord Harries of Pentregarth (CB)
I thank the Minister for her reply. As she rightly said, democracy is a fragile achievement and it is under threat throughout the world. In the light of that, what does she think of the appalling failure somewhere in our society that these figures reveal, with so many young people preferring an unelected leader to democracy? The Ties that Bind, a report of your Lordships’ House chaired by the noble Lord, Lord Hodgson of Astley Abbotts, located this in the failure of citizenship education in schools. I know the Minister can answer only on behalf of the Home Office, but would it be prepared to work with the Department for Education to ensure that future generations are better educated about the value of our democratic way of life than previous generations?
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, citizenship education is incredibly important. That is why the last Government ensured that active citizenship was taught as part of the national curriculum, which this Government are continuing. We are currently in the process of a national curriculum review, which will report shortly. I would be amazed if active citizenship and citizenship are not included. However, we all have a responsibility to do this, such as through the Learn with the Lords programme and active participation, to make sure that young people genuinely understand what we do and why we are not all the same and why there is a difference. I urge noble Lords to participate in that programme and to use the imminent VE Day celebrations to celebrate democracy against tyranny.
The Lord Speaker (Lord McFall of Alcluith)
My Lords, I call the noble Lord, Lord Campbell-Savours, who is participating remotely.
Lord Campbell-Savours (Lab) [V]
My Lords, does this polling not flag up the unfortunate response of a public who, for whatever reason, believe that elected politicians in general duck big issues for fear of the electoral consequences? President Trump’s actions, like them or not, challenge that perception. Surely the public will respond positively to unpopular decisions by the elected if sacrifices apply equally across society and where they believe that all, including the political class, are not exempt. With fair play, equality and sacrifice, we the politicians can resolve this crisis in public confidence.
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, there is a responsibility on us all to demonstrate the genuine value of democracy and to fight for change for our communities and people up and down the country. That is why this Government have a clear plan for change and are delivering on our mission-driven government.
Lord Kirkhope of Harrogate (Con)
My Lords, we have all failed as politicians in our use of populism, rhetoric, abuse of social media and soundbites—finding easy solutions to complex problems. Does the Minister agree that we need to respond to the wishes of young people and give them a much greater stake in what we are doing so that they feel much more included than they have so far?
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I think everybody in your Lordships’ House would agree that there is no politics of easy answers. We have a responsibility to engage on the issues that matter to everyone in this country, regardless of where they are, to make sure that people know that politics makes a difference in their lives. That includes young people, which is why this Government are bringing forward votes at 16.
Lord Wallace of Saltaire (LD)
My Lords, is it not the case that reviving local democracy is a necessary part of trying to re-engage people in politics? England is the most centralised democracy in the developed world. Sadly, this Government are following the Michael Gove approach of removing government further away from local people. Will they rethink the need to make sure that democracy and government are close enough to ordinary people for them to feel that they can participate in meaningful decisions?
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I door-knock and campaign every weekend—the joys of being engaged to a Member of Parliament. This Government are clear on our responsibilities to our local electorates and about making sure that local people feel that they have a voice in our politics. That is why we are bringing forward a devolution Bill.
Lord Evans of Sealand (Lab)
My Lords, democracy depends on participation. As UK Labour Party general secretary at the last general election, I witnessed too much vile and unacceptable behaviour aimed at candidates from all mainstream parties. Too many choose not to stand as a result. With Jo Cox being quoted across this Parliament, can the Minister say how the Government are acting on the very necessary recommendations set out by the commission established in her name to promote political civility?
Baroness Anderson of Stoke-on-Trent (Lab)
I thank my noble friend for his question. Jo Cox was my friend, and noble Lords across your Lordships’ House will appreciate both her legacy and that of Sir David Amess. On the political civility commission, I am so pleased that, before she joined your Lordships’ House, my noble friend Lady Smith of Malvern chaired it and published the report last year. All mainstream political parties have engaged and there were 28 recommendations, 12 of which are in progress and seven adopted, and there are three for individual parties to adopt. It is a core part of what we do, and the Government have a responsibility, with our Defending Democracy Taskforce, to keep safe those who are brave enough to put their name on the ballot paper.
Lord Singh of Wimbledon (CB)
My Lords, democracy is equated with majority rule and can easily become majority bigotry. We see this in the democratic rule of President Trump in the United States, with an alarming increase in the targeting of blacks, immigrants and refugees. In India, the world’s largest democracy, the Home Minister has referred to Muslims as “termites”. Does the Minister agree that a healthy democracy should look to what Sikh’s call “sarbat da bhala”—that is, the equal treatment and well-being of all?
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I spent a great deal of my time running HOPE not hate, campaigning against political extremism up and down the country. We succeed as a country when we celebrate community cohesion and bring people together, which is one of the joys of living in our democracy.
Baroness Goldie (Con)
My Lords, I declare an interest in that I once wrote an essay, and obtained high marks, on the subject of enlightened despotism—I wrote it in the first person. Can we not take some comfort from the inference within the Question that apparently four out of five people within this age group prefer democracy? I offer the Minister an encouraging example. During the independence referendum in Scotland, I saw levels of engagement from young people that I had never seen before. They were passionate and well-informed, but I also observe that they were dealing with people who were people, whatever side of the argument they were on. Does the Minister agree that all parties have a duty in public life to try to behave less like automatons and more like human beings?
Baroness Anderson of Stoke-on-Trent (Lab)
It would be an interesting experience for many in your Lordships’ House if the noble Baroness had the opportunity to be a despot. I could not agree more: it can occasionally feel like the concept of personality and humanity in our politics is missing, and definitely for those in communities—
Baroness Anderson of Stoke-on-Trent (Lab)
One second.
We need to be very clear about who we are, and why we are here.
Lord Blunkett (Lab)
I am not doing too well this morning; I will try again. Can I strongly welcome my noble friend’s replies, not least to the noble and right reverend Lord, Lord Harries? Will she permit me to draw her remarks to the attention of the chair of the curriculum and assessment review, given that the interim report did not mention citizenship at all?
Baroness Anderson of Stoke-on-Trent (Lab)
As I have said before, it is always a mistake to disagree with the noble Lord, so I agree absolutely.
Lord Davies of Gower (Con)
My Lords, in addition to the poll published by FGS Global in January, research by the University of London has suggested that some of those who question democracy do so because they do not feel that they have a stake in our society. What plans do the Government have to promote the engagement of young people in particular in civic activities that will give them the sense of community and belonging which is so important to democracy?
Baroness Anderson of Stoke-on-Trent (Lab)
When I was a Member of the other place, it was my favourite thing to visit schools, and every one of us, in both places, should actively engage with all young people. One of the reasons I personally am so in favour of votes at 16 is that I have seen the barrier to voting for those in their 30s, 40s and 50s who have never voted and may think it is a scary thing to do. If they do it together, as classes, it gives them the opportunity to engage. On that note, happy Easter.
Funerals: Death Certificate Delays
(1 day, 5 hours ago)
Lords ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
Viscount Stansgate
To ask His Majesty’s Government what steps they are taking to reduce reported delays in holding funerals because of changes in the provision of death certificates.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, the death certification reforms are increasing scrutiny of deaths and patient safety, and supporting the bereaved. We are taking steps to reduce the time to register a death, through active monitoring of the reforms, using weekly data from the ONS to target the challenges and the necessary support. We are also working with faith groups and the funeral sector to identify and reduce any obstacles, and sharing any concerns we receive with NHS England so that they can be swiftly resolved.
Viscount Stansgate (Lab)
I thank my noble friend for that Answer. When my dad died—incidentally, he was born 100 years ago today—it was possible to arrange his funeral in two weeks. That is not now possible. I have talked to the National Association of Funeral Directors, and I understand that there is a lot of confusion around the country about the new procedures, although everyone understands why they are there. Is there more that could be done in hospitals or by GPs to help families who are having to cope with the unfamiliarity of the new procedures at the time of their own grief? More widely, might it be possible for the Government to start considering regulating the funeral profession, as has happened in Scotland?
Baroness Merron (Lab)
I am sure that we all wish to pay tribute to the memory of my noble friend’s late father. I appreciate the points that he has made. It is not the case that delays to funerals can be identified and formally linked with the changes in death certification. My noble friend raised a lot of points, many of which are valid. In a bereavement, it is more important than ever that any official processes—as well as the funeral sector itself—work as seamlessly and sensitively as possible. I assure my noble friend that not only are we driving improvement by implementing the death registration reforms but we are very focused on supporting the bereaved. On my noble friend’s point about regulation, I am not aware of any plans at present.
Lord Scriven (LD)
My Lords, to solve a problem, first you have to accept that it exists. Everyone involved in funerals, from the GPs doing the certification to the funeral directors, say that there is a direct link between the extra time to deal with funerals and the reforms. The reforms were needed, but can the Minister clarify the number of medical examiners required in each region—because regional variation exists—to prevent lengthy delays in funeral arrangements? What assessment have the Government made to ensure that the current number of medical examiners is sufficient to meet regional demand?
Baroness Merron (Lab)
I do not have the figures to hand, but I would be very pleased to write to the noble Lord. As I said, this is a complex area. The reforms were introduced in September, and it is very difficult to make before and after comparisons. Since 2001, a long-term trend has shown an increase in the median time between death and registration, and that cannot be attributed to death certification reforms. In addition, the reforms are about the introduction of statutory medical examiners as opposed to the non-statutory arrangements that existed before—and there was even more regional variation before September than we are finding now. I assure your Lordships’ House that I am working very closely with officials to understand the reasons for this so that we can take more action.
Lord Kamall (Con)
My Lords, I thank the noble Viscount, Lord Stansgate, for the conversation we had about this Question. As we all know, when a loved one passes away, it is a distressing time, and surely delays can only add to that distress. I am sure that noble Lords understand why these reforms were brought about in the first place: they were introduced after a qualified doctor, Harold Shipman, murdered his patients and signed the death certificates himself. In a recent Written Answer on these delays, the Minister for Public Health in the other place said:
“The expectation on doctors and medical examiners is clear … they should complete certification as quickly and efficiently as possible, and the Government is working with all stakeholders to make sure this is the case”.
Can the Minister explain to your Lordships what that means? Is the department simply asking them to complete the certificates, or is it identifying blockages or misunderstandings in the system to help unblock them in order to speed up the process?
Baroness Merron (Lab)
The noble Lord’s observations are correct. As I said, it is so important to be timely and sensitive at a time of bereavement. Governments and Ministers have been working to bring in the system over the last 50 years—in fact, it has been overdue for reform for that long, so I am very glad to have taken this action. Introducing this robust system means working with medical examiners as well as the bereaved, so that we hear from them about what has happened. We also work very closely across government, including with the MoJ and the Home Office. As the noble Lord will know, the medical examiner system is led by NHS England through the office of the National Medical Examiner. I reiterate that delays are not due solely to this introduction; it is very important to unpick this issue. We now have better data and get weekly reports, which is helping greatly.
Baroness Finlay of Llandaff (CB)
My Lords, at the Commission on Palliative and End-of-Life Care, chaired by Professor Sir Mike Richards, we have heard from medical examiners and the bereaved. It is clear that the ability for the bereaved to speak to a medical examiner and go through things in detail is very supportive. However, the delays in notifying the cause of death and transferring the case notes seem to be from the doctor who had seen the patient. The medical examiner cannot start until both those events have happened, and at that point their work begins. So the increasing digitalisation of the health service and of notifications could speed up these processes. Does the Minister agree that the digitalisation proposals from the noble Lord, Lord Darzi, will bring about those changes and simplify the process?
Baroness Merron (Lab)
I agree that those changes—the move from analogue to digital, which will be outlined in the 10-year plan—will indeed help in this area, as well as many others.
Baroness McIntosh of Hudnall (Lab)
My Lords, clearly, this is a complex and difficult issue, and there does not seem to be any one reason why these delays have started to extend. Can the Minister tell the House whether there are any financial implications for people who have to wait much longer for a funeral to be arranged, given that they are not cheap to begin with?
Baroness Merron (Lab)
I am not aware of the specifics around that point, but we will be very pleased to look into that because we do not want people to be inconvenienced and distressed even further.
Lord Polak (Con)
My Lords, the Minister will know that, in the Jewish community, we bury our deceased within 24 hours. I have not noticed any change in that since September—so perhaps that fact will help her.
Baroness Merron (Lab)
I am grateful to the noble Lord. He is of course aware that, as the former chief executive of the Board of Deputies of British Jews before coming to this place, I worked on this very area to ensure that there were swift responses and burials for the faith communities that require them. That continues to be a great focus of our work.
Lord McCrea of Magherafelt and Cookstown (DUP)
My Lords, in Northern Ireland, the practice is that funerals are held three days after death. Does the Minister think that anything can be learned from that?
Baroness Merron (Lab)
We are always happy to learn from the practices of other Governments, and we will continue to work on speed and, as I said, to keep distress and delay at a minimum.
Lord Rook (Lab)
My Lords, I point to my entry in the register of interests as an Anglican priest. I am particularly glad that my noble friend the Minister mentioned the challenges for faith communities and the important role that ministers of religion have not only in conducting funerals but in supporting families with grief and loss. Obviously, a delay to those things can cause family stress and tension. What are the Government doing to engage Muslim communities, which particularly feel the stress and pressure of this issue given their obligation to have swift funerals?
Baroness Merron (Lab)
I pay great attention to this area, as I mentioned in my response to the noble Lord, Lord Polak. I met faith group leaders in December, and we have worked very closely with faith groups to develop the medical examiner system. The faith groups are very supportive of the reforms, have broadly welcomed the implementation and continue to work with us to identify any issues, for which I am very grateful. Data from regional medical examiner offices in England, although unpublished, indicate that 88% of requests for urgent scrutiny—the group we are talking about in the faith communities—were met. Indeed, in Wales the corresponding figure has been assessed to be 99%. I assure all noble Lords that we are working extremely hard to make sure that the system reduces any unnecessary delays, and we will continue to do so.
Basel 3.1
(1 day, 5 hours ago)
Lords ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
Baroness Kramer
To ask His Majesty’s Government what assessment they have made of the impact of delaying the implementation of Basel 3.1 on measures by the Prudential Regulation Authority and the Treasury to address base erosion and profit shifting.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, the Prudential Regulation Authority, in consultation with HM Treasury, decided to delay the implementation of the Basel 3.1 reforms in the UK until 1 January 2027, taking into account competitiveness and growth considerations, given the current uncertainty around the timing of their implementation in the US. The delay to Basel 3.1 has no bearing on the base erosion and profit shifting policy agenda, where the Government are committed to ensuring that multinationals pay their fair share of tax in the UK.
Baroness Kramer (LD)
My Lords, seven mega US tech companies avoid some £2 billion a year in UK corporation tax by using base erosion and profit shifting. The 2% digital services tax clawed back £800 million of that this year, and it is due to be replaced under Basel 3.1, as agreed by the OECD, G7 and G20, with the undertaxed profits rule, put into UK law in the Finance Act last week. It would claw back significantly more. Can the Government tell us if they are prepared to abandon the DST and mothball the UPR at the behest of the Americans? How can UK companies compete when their US rivals are permitted in the UK to avoid at least two-thirds of the tax that UK companies have to pay?
Lord Livermore (Lab)
My Lords, as the Chancellor has said clearly, we will continue to make sure that businesses pay their fair share of tax, including businesses in the digital sector. The UK’s digital services tax is a fair and proportionate approach to taxing business activities undertaken in the UK, and it remains the UK’s intention to repeal it once a multinational solution is in place. We will continue to work with the US to understand its concerns and consider how these can be addressed in a way that meets both countries’ objectives. I will not give a running commentary now on those discussions.
Baroness Neville-Rolfe (Con)
My Lords, the removal of the SME support factor when Basel 3.1 is implemented will lead to higher capital charges for loans to our vital small and medium-sized companies. Can the Minister update the House on the Government’s assessment of the implications for small business, especially for those ready to take entrepreneurial risk, which is needed for the growing economy that he mentioned?
Lord Livermore (Lab)
We very much support small businesses, and we will do all that we can to support them in this economy. We will come forward soon with a small businesses strategy that will set out this Government’s approach. I do not think that the delay to Basel 3.1 is directly relevant to that issue. It is about ensuring that we have a level playing field and that we maintain the competitiveness and growth objectives that we have set out.
Lord Purvis of Tweed (LD)
My Lords, further to my noble friend’s question, this will apply to businesses that are making more than €20 billion in profits, operating within the United Kingdom and not paying their fair share of tax here. Why are the Government asking another country—under the Trump Administration—to have a veto over how we tax businesses that are operating in the UK for our benefit?
Baroness Wheatcroft (CB)
Could the Minister reassure the House that simply not wanting to pay any more tax would not be a reason for renegotiating?
Lord Livermore (Lab)
I am happy to give the House that assurance.
Lord Blunkett (Lab)
I ask my noble friend the Minister a googly question, as Donald Trump would say: as difficult as these matters are, is there not a good rule of thumb for the Government to decide whose side they are on?
Lord Livermore (Lab)
Yes, and this Government are absolutely clear: we are on the side of working people.
Baroness Kramer (LD)
My Lords, I will come back to the Minister, who has been trying hard to answer these questions without telling us too much. He will be aware that there have been different comments within his own Administration about whether the digital service tax is indeed in the mix in the trade negotiations that are apparently taking place with the States. We understand that there is great hope from the UK Government that there will be a positive outcome of those negotiations within the next two weeks. Is he telling us that the DST and the mothballing of the UPR are not on the table as part of that discussion?
Lord Livermore (Lab)
As I have said already, we will continue to make sure that businesses pay their fair share of tax, including businesses in the digital sector. We want the best deal for the UK, so I am not going to undermine negotiations by commenting on the talks or on what is or is not up for negotiation. The Prime Minister has been clear that we will only agree to a deal that is in our national interest.
Baroness Neville-Rolfe (Con)
My Lords, as there is a little bit of time, I also wish the House and the Minister a happy Easter and come back to him on the question of small businesses and Basel 3.1. There is a concern that when that comes in it could affect lending to the smaller businesses. I hope the Minister will have a look at that. I note that it has been delayed, but when it comes in, we want to make sure that our small businesses, and indeed our smaller banks, are not discriminated against.
Lord Livermore (Lab)
I am grateful to the noble Baroness for her comments. I wish her and the whole House a happy Easter as well.
I continue not to agree with her on Basel 3.1’s impact. Basel 3.1 is an update to the Basel III regulatory framework, aimed at further strengthening bank capital requirements and risk management by refining the calculation of risk-weighted assets and enhancing transparency. I am not sure it is about what she is saying it is.
Lord Lilley (Con)
In the pre-Easter spirit, I offer the Minister a point where he is likely to agree with me for once. He could have reminded the Liberal Democrats that, had we followed their advice of rejoining the customs union, we would face twice the level of Trump tariffs we currently face and have no prospect of negotiating a free trade deal with the United States. I am glad that he is exploiting the Brexit benefits.
Lord Livermore (Lab)
If the noble Lord makes that claim, then we are going to have to see his working, because I am not sure he is including the permanent 4% reduction in GDP from his Brexit deal.
Myanmar Earthquake
(1 day, 5 hours ago)
Lords ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
Lord Crisp
To ask His Majesty’s Government what action they are taking to ensure that their aid reaches those affected by the earthquake in Myanmar.
The Minister of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)
My Lords, our £10 million of humanitarian assistance will be directed to our existing local partners on the ground to ensure it reaches those most affected throughout Myanmar. No funding will be directed through the Myanmar military regime.
I am pleased to announce that the UK will also be aid matching the Disasters Emergency Committee, with every £1 donated by the British public being matched by the UK Government up to the value of £5 million. These funds will support DEC charities and their local partners, who are already responding on the ground.
Lord Crisp (CB)
My Lords, I thank the Minister for her response. We are witnessing a natural tragedy of an earthquake affecting those already living in a war zone, coupled with what one can only say is an appalling human act of the junta apparently taking advantage of the situation to continue its bombardment and its air strikes.
I very much applaud the Government’s immediate offer of £10 million and this additional £5 million as well. I have two questions: first, how will the Government respond to the appeal from the National Unity Government—the Government in exile, as it were—for immediate aid and for rebuilding communities? As the penholder at the United Nations, how is the UK leading international efforts to bring additional pressure on the junta?
Baroness Chapman of Darlington (Lab)
The noble Lord is quite right to remind us that this earthquake follows years of difficulty and tragedy for the people of Myanmar. We will continue to work with our international partners to bring about the change, peace and stability that people in Myanmar so deserve. The context is incredibly difficult, as he knows. We have seen military air strikes in earthquake-affected areas, which have further complicated our relief efforts. My focus at the moment is on trying to get aid to those who need it most immediately.
Lord Callanan (Con)
My Lords, all those who watched the pictures on the BBC last night will have been appalled at the scenes of utter devastation, particularly in Mandalay. We welcome the Government’s announcement of a £10 million humanitarian aid package. Could the Minister provide a bit more detail on the trusted partners that the Government referred to as a means of providing that aid? Can she provide some more information on how we can avoid any of that aid going to the military junta?
Baroness Chapman of Darlington (Lab)
I thank the noble Lord for the support for the action that the Government have been able to take so far. Noble Lords will understand the reasons why we work through local partners on the ground: they are the best way to get the support to those who need it. I ask the noble Lord to also understand the reasons why we do not name or give details of those partners acting locally. It is for their protection and to make sure that they are able to continue to do their vital work.
Baroness Curran (Lab)
My Lords and Ladies, I thank my noble friend for her replies thus far and her commitment to this task. I have visited Myanmar many times, including the cities of Mandalay and Naypyidaw, and I am acutely aware of the suffering of the Myanmar people, which has been compounded so grievously in recent days and weeks. When the headlines move on, as they invariably will, will my noble friend keep focused on the struggles of the Myanmar people and use whatever channels she can consistently to call out the brutalities of the Myanmar junta that it has perpetrated on its own people?
Baroness Chapman of Darlington (Lab)
I am very happy to provide that assurance to the House today and I will take the opportunity to thank the noble Baroness, Lady Curran, as well as very many other Members of this House, for their commitment and work, and the focus they have placed on Myanmar over the years. As the noble Baroness says, it is vital that, when the media attention perhaps moves on, our focus as political leaders in this country and as the Government remains in place.
Lord Purvis of Tweed (LD)
My Lords, I thank the noble Lord, Lord Crisp, and the noble Baroness, Lady Curran, for years of work supporting civil society, and especially those in the medical field in Myanmar, and I welcome the Government’s immediate response with regard to the support that they are providing and the DEC appeal—I wish that appeal had acted on Sudan also. Can the Minister say, further, with regard to the reactions of the Myanmar military regime, what actions we can take with our near neighbours to ensure that there is no impunity for the military regime, which, at this time of immense suffering of its own people, is perpetrating the restricting of rights, especially of minorities within Myanmar? It is acting in the most barbaric way in the midst of a humanitarian crisis.
Baroness Chapman of Darlington (Lab)
The noble Lord is completely right; we do not regard the military regime in Myanmar as a legitimate Government. We will take any steps that we are able to with our friends and allies, including sanctions and other measures, in order to bring about the peace, stability and change that the people of Myanmar deserve.
Lord Ahmad of Wimbledon (Con)
My Lords, building on the question from the noble Lord, Lord Purvis, about minorities in Myanmar, the Rohingya community has suffered more than most, and we have also seen the prevailing sexual violence in Myanmar. Can the Minister assure us that, while we are dealing with this immediate crisis, the focus will also remain on the plight of the Rohingya, that the United Kingdom retains a pen on the issue and that the issue is brought forth at the UN Security Council?
Baroness Chapman of Darlington (Lab)
Yes, that is right. I commend the noble Lord’s work, particularly on sexual violence in conflict, which he has led over many years. Fortunately, the epicentre of the earthquake did not hit Rakhine province as harshly as it did other areas, but the Rohingya people are still suffering enormously. The noble Lord is right to make sure that we do not lose focus on that, and I hope that he will continue to do so.
Lord Alton of Liverpool (CB)
My Lords, the noble Baroness is absolutely right to say that, in addition to the humanitarian needs that now prevail inside Myanmar, the minorities referred to by the noble Lord, Lord Ahmad, are suffering—I think of the Karen people, whose state I visited in the past in Burma. There has been a total of 11 reported attacks on ethnic minorities and civilian communities since the earthquake. Is this not piling tragedy upon tragedy? Although I support what the noble Baroness has said about her call for global sanctions, what about an arms embargo as well? Will we also take to the Security Council a call to ban the sale of aviation fuel to the military to prevent it being able to carry on with these appalling attacks on civilian populations?
Baroness Chapman of Darlington (Lab)
The Government are prepared to consider any measures that might bring about the peace, security and stability that we wish to see. We are aware of reports such as those the noble Lord suggested, and we are working to verify them. The sad truth is that the reports that we have had thus far may not be the full picture and, equally, the death toll of around 2,800 that we have so far is unlikely to be the final picture. So we are watching events very closely and we will consider carefully what the appropriate action from the Government will be.
Baroness Sugg (Con)
I welcome the emergency assistance announced by the Government. Health professionals are on the front line here; will any of this additional UK aid be allocated specifically to them?
Baroness Chapman of Darlington (Lab)
The noble Baroness is right and, yes, we are working in particular to ensure that health assistance is available, as well as getting the food, the medicines, the water and the shelter in immediately. I am aware that the noble Lord, Lord Crisp, who asked this Question today, has been doing some important work on training nurses in Myanmar. So there is the immediate response that the noble Baroness refers to, but there is also the longer-term work that we must continue to do.
Baroness Hayman (CB)
My Lords, as a previous trustee of the DEC, I welcome very much the aid match that the noble Baroness has referred to today. I am sure that the British public will respond very generously, as they always do to DEC appeals. Can she ensure that the figure she has announced is kept under review—and I do not mean downwards?
Baroness Chapman of Darlington (Lab)
I hear what the noble Baroness has said. At the moment, we have committed to match up to £5 million and I am sure, as she says, that the British public will rise to the challenge. It would be great to be in a situation where we are asked to increase that number because the response from the public has been so impressive.
Lord Geddes (Con)
My Lords, how can we ensure that the very welcome aid to which the noble Baroness has referred goes to those who need it most, when foreign correspondents are not permitted by the regime to enter Myanmar?
Baroness Chapman of Darlington (Lab)
That is a very good question, and it is why we work with partners on the ground in a localised approach. We have trusted partners on the ground in Myanmar who we have worked with for many years now, so that is the best way to make sure that the aid does get to where it is needed most, and we have confidence that that is happening.
NHS Pensions
(1 day, 5 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Kamall (Con)
My Lords, in the other place, in response to a question from the honourable Member for North Shropshire, the Minister there said:
“HMRC has also confirmed that self-assessment late filing penalties will be waived on appeal in certain circumstances where a member receives a delayed pension savings statement as a consequence of the implementation of the McCloud remedy”.—[Official Report, Commons, 1/4/25; col. 166.]
One of the frustrations that people sometimes have when dealing with government or large organisations is that their advice is not always clear. I want to ask the Minister two questions. Can she explain to your Lordships the specific “certain circumstances” where the penalty will be waived, and can she explain the thinking behind the Government deciding not to waive the penalty for everyone affected, given that responsibility for delays is with the NHS and not with those affected?
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
It may be helpful if I respond to the noble Lord by saying that a compensation scheme is already in place to cover direct financial losses, certain HMRC interest charges and the costs of financial and accountancy advice. On the specific point that the noble Lord raises, I will be very pleased to answer further on the response of my honourable friend in the other place.
It is also important to remember that this arises from a reform to public service pension schemes in 2014 and 2015 under the coalition Government. As part of those reforms, older pension scheme members were given protections enabling them to stay in legacy schemes, but younger members were moved on to reformed schemes. Therefore, legal cases were brought, and the Court of Appeal found against the then Government. We are dealing with an inherited situation, and we are working at pace to get the right things to people, but also in order that people do not lose out.
Lord Scriven (LD)
First, I have to declare an interest as a member of the NHS pension scheme. To be helpful, will the Government look at taking two urgent measures to help alleviate some of the problems that the late delivery of these statements has caused? The first is to extend the carry-forward rules from three to five years, and the second is to provide an immediate remedial service statement for those needing transitional tax-free amount certificates. If the noble Baroness cannot answer in full, a written response would be welcome.
Baroness Merron (Lab)
I am very glad that the noble Lord has given me that option, which I will gladly take. Perhaps it would be helpful to your Lordships’ House for me to say that the deadline to issue remedial service statements was 1 April or later. That was not achievable because of the level of technical complexity, capacity, and delays in HMT and HMRC setting out lower-level policy requirements under the previous Government, so Minister Karin Smyth extended this deadline last week and published a new timetable. Separately, 137,000 higher-earning members of the NHS pension scheme require remedial pension savings statements as part of their remedy. The deadline for that was 6 October. HMRC did not allow this to be amended. The current position is that, to date, 94,012 statements of the 137,000 have been issued. These delays are due fundamentally to the annual allowance element of the remedy being poorly designed and, again, late requirements provided by HMT and HMRC. To say that this is a knotty problem would be underestimating it.
Baroness Watkins of Tavistock (CB)
I thank the Minister for the assurance in the Statement that no individual member will in the long term suffer financial detriment. However, is she able to explain how the NHS Business Services Authority issued 23,000 inaccurate statements against 57,000, which is over 30%, and what are we doing to get efficiency and effectiveness from this authority?
Baroness Merron (Lab)
I appreciate the point that the noble Baroness refers to. The priority is to get this matter resolved, as she will appreciate. With respect to the NHSBSA, we will also be working closely with it to ensure that the correct service is given in future. Obviously, I want to see this put right to assure people as soon as possible.
Lord Davies of Brixton (Lab)
I thank my noble friend for her further clarification of the issues here. This is an extremely complex issue, and I know that better than most because I was involved in the original negotiations, going back to 2011.
What was disappointing about the discussion in the House of Commons on this issue was that there was overemphasis on working out who was to blame rather than on achieving a solution at pace. I thank the Minister here for focusing. Can she give an assurance, first, that everything is being done to resolve this situation? There is also the issue of the way in which the Statement is worded, referring specifically to financial loss. Those people have had to suffer high levels of uncertainty and delay in making their arrangements, which is not easily captured in the term “direct financial losses”. They will be significantly concerned about that lack.
Finally—I feel some sympathy for my noble friend—this is an issue that runs across all the public service schemes. Similar problems are arising in other schemes, not quite to the same extent, but there is failure there. Does my noble friend agree that this illustrates that any changes to public service pensions need to be considered extremely carefully, before we end up with similar problems down the line?
Baroness Merron (Lab)
I certainly agree with my noble friend. This runs across all public service pensions. Indeed, it is not just the issue of pensions but the administration and support given. To the point raised by both my noble friend and the noble Baroness, Lady Watkins, I should add that the NHS Business Services Authority and the department are in regular contact with the Pensions Regulator on delivery.
I can certainly give the assurance to my noble friend that we are working cross-government to ensure that these difficulties are corrected as soon as possible. I absolutely recognise the inconvenience, uncertainty and potential distress that have been caused to individuals. As I say, this has a root in it being discriminatory from 2014-15. That said, it falls to us to put that right.
Baroness Altmann (Non-Afl)
My Lords, does the noble Baroness agree that at the heart of this problem is the complexity of our pension system and the tax rules, which have undermined the generosity of public sector pensions, which are meant to be a really generous benefit but have turned into a hugely unwelcome cost for our most senior medical staff and nursing staff, as well as others in the public sector? Is she looking, at the same time as trying to correct some of these errors, at finding other ways of improving the problems in the scheme, which will remain even after the statements are issued, such as doctors and nurses themselves having to go on to an HMRC tool to retrospectively adjust their annual allowances for the various tax years going back all those years? Will there be consideration of addressing the cost of scheme pays? Has consideration been given to providing independent financial advice for senior members of the scheme, who would then have some comfort that what they are frightened of—and is driving early retirement or stopping overtime—is either unnecessary to worry about or can be dealt with in another way?
Baroness Merron (Lab)
I very much value the noble Baroness’s expertise in this area, so I particularly value her acknowledgement of the complexity of the scheme. Certainly, in our efforts to support the workforce, we consider all matters to make working for the NHS better and simpler. There has been talk—the noble Baroness did not quite say this—that pension issues are impacting NHS activity. There is no evidence of that. Nor is there any clear evidence from NHS payroll data that pension tax rules limit the activity of, for example, the consultant workforce overall. All that said, I, as ever, will be pleased to take away the suggestions that the noble Baroness makes and to have them looked into.
Bosnia and Herzegovina
(1 day, 5 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Callanan (Con)
My Lords, Britain has always been a steadfast supporter of the sovereignty of Bosnia and Herzegovina. I am pleased that the Government have continued that policy. Can the Minister update the House on the Government’s position on NATO membership for Bosnia and Herzegovina and whether we would support its application to join?
The Minister of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)
I thank the noble Lord for acknowledging that we continue in the way that his previous Government acted on this issue. On NATO membership, there is a great deal of work to do for Bosnia and Herzegovina, but we support that track in principle. We have been clear in our public statements and in our discussions with regional partners, including Minister Doughty’s calls with the Bosnian Foreign Minister on 10 March and with the high representative on 27 March, that the UK remains committed to supporting the territorial integrity of Bosnia and Herzegovina.
Lord Purvis of Tweed (LD)
My Lords, this issue is central to our national security interests, whether on immigration, organised crime or resisting Russian interference. I pay tribute to the noble Baroness, Lady Helic, whose work has been bringing these concerns to the British public, which is extremely important.
My question to the Development Minister is a development question; she will not be surprised that I ask it. The western Balkans freedom and resilience programme is now in its final year. It is a £31 million programme involving 20 local organisations all focused on supporting civil society, governance and resilience against interference, as well as building up social cohesion. Previously, I have asked the Minister for ODA programmes scored under official development assistance that are linked to our national security interests to be protected. Can the Minister state that there will be a future western Balkans freedom and resilience programme? If anything is critical to our wider security interests, it could be official development assistance in that area.
Baroness Chapman of Darlington (Lab)
I echo the noble Lord’s comments about the noble Baroness, Lady Helic. Her work has kept this House focused on the western Balkans over many years. On ODA and protecting various streams of work, I wrote to the International Development Committee in the other place last week or the week before, explaining the process that we are undertaking. Very briefly, for the benefit of Members of this House, we are protecting anything we are currently contracted to. We are also protecting everything for this financial year in our humanitarian work. Everything else we are looking at on a case-by-case basis.
I have been asked by the Prime Minister to look line by line at our spend. I am not in a position to protect any other streams of work or any particular programmes at this stage. Our desire is to create headroom to smooth out the spending reductions that will have to take place at the end of this financial year. That is the work we are currently undertaking. The noble Lord will understand that I am not in a position to make firm commitments today. That would be wrong. The work that he describes to do with security, particularly in the western Balkans, has proved to be effective and is incredibly important given the wider context in that region.
Baroness Helic (Con)
My Lords, I thank noble Lords for their kind words. I welcome the Foreign Secretary’s visit to the western Balkans, which concluded last night. He rightly stated that
“the Western Balkans is of critical importance to the UK and Europe’s collective security, and the UK remains committed to building resilience and stability in the region”.
With that in mind, Britain has now signed a deal with Serbia to disrupt people smuggling, an important step given the record number of channel crossings in the first three months of this year. These are fine words and fine agreements, but they will not be enough if secessionists with active support from Russia and Serbia succeed in breaking up Bosnia unchallenged, risking a new regional conflict. The Government have so far refused to move beyond rhetoric and support EUFOR, the only real deterrent on the ground.
Does the United Kingdom intend to negotiate a post-Brexit agreement with the EU of the kind that Norway and Chile have in place, to enable our participation in Operation Althea in line with standard procedures for third-country contribution to NATO’s EU-led missions?
Baroness Chapman of Darlington (Lab)
Since Brexit we have tried to work more and more closely with our EU partners, particularly on defence and security, for the reasons the noble Baroness has outlined. We are working closely to determine quite what form that takes. I am not in a position to say exactly what that will be, but we are in the business of resetting our deeply damaged relationship with the European Union. No one can be in any doubt, given the nature of the conversations that we have been having on this issue and on Ukraine, about our closeness and our collective determination that we must work more closely together in the future.
The Lord Bishop of St Albans
My Lords, we are living in a very vulnerable time when false narratives are being spread and some are not being challenged. I understand that Voice of America is not broadcasting in the way it was. Meanwhile, Russia is spreading false information and using its allies. This is at a time when there is a huge economic readjustment across the whole world and people are not looking so much to the West. What are His Majesty’s Government doing to ensure that the BBC World Service is making sure that a positive but accurate historical narrative is being given so that other narratives do not take hold?
Baroness Chapman of Darlington (Lab)
That is a very important question in many contexts around the world, but specifically this one. I was pleased that we were able to protect and enhance the funding that we provide for the World Service recently. As has been said, it is a vital tool for connecting with communities in very difficult circumstances and countering some of the misinformation and disinformation and the hybrid warfare that takes place in contexts such as these. We will continue to work closely with the World Service. It is about not just providing information today but making sure we have the longer-term narrative and accurate information to look back, to know what has happened and to tell the story properly as the historical record.
Lord Lancaster of Kimbolton (Con)
Having served as a NATO peacekeeper in Bosnia and Herzegovina, I have a particular interest. This year marks the 30th anniversary of the Dayton peace agreement. It was a complex agreement and has led to pretty poor political structures in Bosnia and not a strong state. This has been exploited by criminal gangs with people smuggling and other issues. High Representative Schmidt has made 11 interventions using the Bonn powers to amend the constitution, but fundamentally it remains unfit for purpose. Is it the British Government’s view that to enable EU accession, that constitution needs to be changed?
Baroness Chapman of Darlington (Lab)
We support the role of the high representative and the use of his executive powers as the situation has required them. This role remains vital for Bosnia and Herzegovina’s future prosperity and stability. We are clear that the current political crisis was caused by Republika Srpska, President Dodik, his supporters and their secessionist actions. We will continue working to find the right way forward.
Lord Hannay of Chiswick (CB)
My Lords, will the Minister go a little further than she did in replying to the noble Baroness, Lady Helic, about peacekeeping in Bosnia and any role that the United Kingdom might play in that? Does she not agree that this ought to be on the table in discussion of the security pact currently being considered between the UK and the EU? A resumption of British involvement in that would be a very important signal.
Baroness Chapman of Darlington (Lab)
We see EUFOR as vital for maintaining peace and security, and upholding the military aspects of the peace agreement. The UK regularly engages with the EU delegation to Bosnia and Herzegovina, and we are committed to supporting security through NATO and our bilateral defence co-operation. While the UK does not currently participate in any EU common security and defence policy missions, it is open to exploring future opportunities for co-operation.
Sentencing Council Guidelines
(1 day, 5 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Keen of Elie (Con)
My Lords, two days ago, magistrates and judges across England and Wales were, in effect, blindsided. At midday, they were informed that sentencing guidelines that they thought had come into force had in fact been suspended. The courts would have been sentencing offenders under guidelines that the Lord Chancellor herself now admits are fundamentally flawed. These are guidelines which, she has stated, would inflict a “two-tier” system of justice, undermining fairness and consistency in our courts.
In addition, buried in the very email sent to judges and magistrates, the Sentencing Council somewhat audaciously declared that
“we remain of the view that the guidelines are necessary and appropriate”.
While the Lord Chancellor advised in the other place on Tuesday:
“I believe that we must reverse them”.—[Official Report, Commons, 1/4/25; col. 183.]
So the Lord Chancellor says one thing and the Sentencing Council continues to say another.
This situation was entirely preventable, had the Lord Chancellor put party politics aside weeks ago and backed, rather than blocked, the Bill that my right honourable friend Robert Jenrick introduced in the other place. This Bill would have restored accountability and given the Lord Chancellor the power to govern justice policy. We may welcome the belated introduction of the Lord Chancellor’s Sentencing Council Bill, although I express regret that it had to come to this. However, we should be clear that the proposed Bill does not address the core of the problem, which concerns the status and accountability of the Sentencing Council.
There have already been concerns about other aspects of the Sentencing Council guidelines. Public reference has been made to the guidelines on immigration offences, although I understand that they are debated and indeed disputed. Further concerns have been expressed about guidelines on the provision of bail, where there is particular reference to the priority of ethnic minorities and transgender offenders. That also is a potentially discriminating practice that should not be maintained in our criminal justice system.
What is now required is a calm and considered review of the entire situation, rather than just a knee-jerk reaction Bill that addresses a symptom rather than a cause. I therefore invite the Minister, on behalf of the Government, to commit to a comprehensive review of all Sentencing Council and Ministry of Justice guidance on sentencing policy and bail policy, which should properly rest with the Government in the form of the Ministry of Justice and not with a wholly unaccountable Sentencing Council—however high a regard we have for those who sit in that council.
Lord Marks of Henley-on-Thames (LD)
My Lords, the Lord Chancellor maintains that this Statement raises issues of principle, that it is about policy being for Parliament and not for judges, and that the Sentencing Council has breached the principle of equality before the law. We hear complaints from the Conservatives in particular—the noble and learned Lord, Lord Keen, is no exception to this, and it is unsurprising that I take a different view from him—of judicial overreach and of a two-tier justice system. However, all in this House are committed to equality before the law.
The background to the new proposed guidelines is the wealth of evidence, almost entirely undisputed, that ethnic minority defendants are more likely to be sent to prison than white defendants. Yesterday I mentioned the Lammy review, but there is so much more. This inequality of outcomes must be addressed; it is the very opposite of equality before the law.
Pre-sentence reports are a vital tool that enable judges to take into account the circumstances of an offender as well as the nature of the offence for which he is before the courts. The Lord Chancellor appears to accept that. The only other significant assistance a sentencing judge receives on an offender’s background and circumstances is the speech in mitigation from defence counsel. Although speeches in mitigation are powerful tools, they are made by defence counsel on the instructions of the defendant, so they are neither independently prepared nor impartial. They also cannot generally be independently verified, as pre-sentence reports can.
So we need these reports, and they have long been intended to be the norm not an optional add-on, yet resources for these reports have, in effect, been rationed. The Probation Service was hopelessly mishandled by the last Government, and one result is that there is not enough money to fund the number of pre-sentence reports we need. The noble Lord, Lord Timpson, yesterday gave the figures: the number of pre-sentence reports is down by 44% between 2013 and 2023.
The letter from the chairman of the Sentencing Council to the Lord Chancellor on 10 March explained the very thorough process that had led to these new guidelines, in the context of the statutory duty imposed by Parliament for the Sentencing Council to give guidelines to judges on sentencing. Part of the reason behind establishing the Sentencing Council was precisely to encourage consistency in sentencing—that is, equal treatment before the law—yet now we have the Government resorting to hastily drawn and unhelpful emergency legislation that tries to address a complex issue in simplistic terms. The operative section would provide that
“sentencing guidelines about pre-sentence reports may not include provision framed by reference to different personal characteristics of an offender”.
A subsection goes on to say that the “personal characteristics” may include—not must include—
“in particular … race … religion or belief … cultural background”.
The cohorts identified by the Sentencing Council as normally calling for a PSR include being a young adult, female, pregnant, or postnatal. Are those not personal circumstances and are they not relevant?
The solution to this is not emergency legislation. The emergency has now passed because the Sentencing Council has paused introduction of the guidelines. This emergency Bill has not yet had a Second Reading, and I therefore invite the Government to withdraw it now and end this unnecessary row. It is unseemly and widely regarded as such by the public. I suggest that the solution lies in rational and moderate discussion between the Sentencing Council, the Lady Chief Justice and the Government, to which Ministers in this House from the Ministry of Justice would have an important contribution to make.
The first aim would be to reach a solution that ensures that pre-sentence reports are properly funded so that they become the norm once again in all cases where a substantial prison sentence is not inevitable. The second would be that we recognise these reports play an important part in addressing and reducing the inequality of outcomes for ethnic minority defendants—this must be a major priority of the Government. The third would be that we all respect and ultimately achieve genuine equality before the law.
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Ponsonby of Shulbrede) (Lab)
My Lords, I thank both noble Lords for the points they have made and the questions they have asked. To set the scene, we believe the guidelines, as formerly suggested, risk differential treatment before the law, and that is why we opposed them. We asked the Sentencing Council to revise the guidelines, and it did not do so. The Lord Chancellor introduced legislation a couple of days ago to address the specific issues to which the Government object, and the Sentencing Council has put its guidelines on hold while Parliament has its say on these matters. The Lord Chancellor has gone further than this: she has committed to reviewing the role of the Sentencing Council more broadly and is considering all options. We are grateful to the Sentencing Council for pausing the introduction of the guidelines so that Parliament can have its say on the Bill that has been introduced.
The noble and learned Lord, Lord Keen, referred to the Conservative Party’s proposed Bill. We believe that that Bill goes wider than necessary, and the Bill that the Government are putting forward is addressing the specific point within the guidelines to which the Government object, but we acknowledge that there are wider considerations, and that is why my right honourable friend has put in place this wider consideration of the role of the Sentencing Council and its recommendations. I reject the noble and learned Lord’s assertion that magistrates and judges were blindsided. I do not think they were, and I do not think there would have been any inadvertent sentencing. I reject that accusation. I think there is a core problem here, which my right honourable friend has acted swiftly to address.
I agree with a lot of the points made by the noble Lord, Lord Marks. I was just reflecting that, in my previous role as a magistrate, I would have ordered many hundreds of pre-sentence reports, but I am conscious that, sitting in this Chamber now, there are colleagues who would have ordered many thousands of pre-sentence reports throughout their career. Of course, I agree with the points he made that they are an invaluable tool for anybody seeking to sentence in our criminal courts and that they had been degraded under the previous Government in their use and, to be frank, in the trust they were held in by sentencing magistrates or judges. It is very much the current Government’s intention to increase the number of probation officers—there were 1,300 more last financial year and there will be another 1,000 in the current financial year, and it is very much anticipated that there will be an enhanced role for the probation services as we move forward with future recommendations on sentencing, which are imminent. I agree with the general points that the noble Lord made about the importance of pre-sentence reports, and we want to build on that.
On the point the noble Lord made about the wider cohorts which are not explicitly referred to in the published Bill, I make the point that any judge or magistrate can always order a pre-sentence report as they wish. That has always been, and remains, the situation. Just because a specific cohort was not referred to in the Bill does not mean that judges cannot go ahead and order pre-sentence reports as they see fit. Nothing has changed in that context.
In conclusion, this is clearly a difficult situation. However, the Lord Chancellor has strong views on these matters, and it is of utmost importance that the wider public have, and continue to have, faith in our court system and the judiciary, which the Government certainly hold in the highest regard.
Lord Phillips of Worth Matravers (CB)
My Lords, I used to chair the Sentencing Guidelines Council, which was the predecessor to the present Sentencing Council. As the House has heard, a primary role of the Sentencing Council is to promote consistency in sentencing. At present, there is an apparent inconsistency, in that ethnic minority defendants appear, according to statistics, to be receiving more severe sentences than white defendants. The Sentencing Council guideline that is under attack instructs judges to call for a pre-sentence report before sentencing a defendant from this cohort. Might not this guidance be intended to promote consistency of sentencing rather than the contrary? If there is a question as to whether it achieves this object, could this not better be dealt with by discussion rather than legislation?
Baroness in Waiting/Government Whip (Baroness Anderson of Stoke-on-Trent) (Lab)
My Lords, I am so sorry, but the Minister needs to reply.
Lord Ponsonby of Shulbrede (Lab)
My Lords, I thank the noble and learned Lord for the point he makes, and I accept that the reason the guidance included those specific phrases was to address the points made in the Lammy Review a number of years ago. The point that my right honourable friend makes and objects to is that that leads to a perception of unfairness in sentencing. While we acknowledge the fundamental mischief, if I can put it like that, of differential sentencing of certain ethnic and racial groups, we think there is a better way of addressing that, rather than explicitly referring to it in the guidelines to the judges and magistrates when they make their sentencing decisions.
The Lord Bishop of Southwark
My Lords, the independent Lammy Review of 2017, concerning the treatment of and outcomes for BAME individuals within the criminal justice system in England and Wales, identified disproportionate outcomes in a number of areas. I ask the Minister about two points raised in the final report relevant to the issue and whether there has been any progress. One was a lack of sophisticated data around ethnicity in the criminal justice system, and the second was that white suspects appearing in court were markedly more likely to plead guilty to an offence and thereby benefit from up to a one-third reduction in the sentence than was the case with BAME suspects.
Lord Ponsonby of Shulbrede (Lab)
My Lords, I thank the right reverend Prelate the Bishop of Southwark for those questions. Regarding the lack of sophisticated data, that is a fair point, and we are continuing to work on building up that database, but it is an ongoing project to properly understand the nature of the differential treatment. The second point the right reverend Prelate makes is about the propensity of certain groups not to plead guilty, which means that they do not get the discount. That is certainly true in my experience of sitting in youth courts and adult magistrates’ courts. However, I do not think it accounts for all the disparity in sentencing, and I think there is more to the story. That needs to be gone into, and a better database would help the Government do that.
Lord Garnier (Con)
My Lords, having worked in justice for nearly 50 years and in Westminster for nearly 40 years, I am not so naive or squeamish as to be shocked by this political squabble over the recent sentencing guidelines. That said, will the Minister accept that the most difficult job for any sentencer—as he and I know from experience—is to sentence the defendant in a way that does justice to the victim, the public and the defendant? Will he also accept that the failure to ensure the provision of far more pre-sentence reports, which are, as he said, an invaluable tool to assist the sentencer, is not confined to this or the previous Government but is of long standing? Will he also agree that although we all have the right to criticise a sentence, even from a position of ignorance of the facts before the judge, parliamentarians should not resort to ugly personal attacks on members of the judiciary, who cannot respond?
Lord Ponsonby of Shulbrede (Lab)
I agree with all the points the noble and learned Lord has made. It is for sentencers to sentence in a way that can be understood by the offender, the victim and the public. All our adult courts are open to the public and the press. It is also true in youth courts, which are not open to the public, but the same principle obtains. It is worth adding that, in my experience, pre-sentence reports compiled for the youth court are far more extensive than those compiled for the adult court. When it comes to the extent of pre-sentence reports, the Probation Service, which compiles them for the adult courts, has something to learn from YOTs that compile reports for youths who are sentenced. I realise that that is a resource issue, but nevertheless when one sentences, as I used to do very regularly, the difference in those reports was quite stark.
Lord Boateng (Lab)
My Lords, I declare my interest in the register as a non-practicing member of the Bar of England and Wales. I have also been a Minister of State in the Home Office, so the Minister has my sympathy. Will he please address this issue? He has described the disadvantageous treatment of black and brown people of colour under the criminal justice system as a mischief. He has accepted the Lammy report, as did the previous Government. He said that the Government believe that there is a better way to deal with that mischief. What is that better way, and when will Ministers, having slapped down the Sentencing Council, do something about it?
Lord Ponsonby of Shulbrede (Lab)
Clearly, I cannot give a time or date in answer to my noble friend’s question about when the review will conclude. It is a complex issue, as he knows as well as I do. One very important factor is that all people who come in front of courts should believe that they will be treated equally fairly. If they are aware of differential sentencing guidelines, that undermines that trust. That is the fundamental belief of the Lord Chancellor, and it is one that I share. It is a complex question. We acknowledge the fundamental mischief, but we want to find a better way of addressing the discrimination in the system without anyone who comes up in court believing that they are going to be treated differentially from anyone else.
Lord Carter of Haslemere (CB)
My Lords, the Government’s Bill would exclude references in the sentencing guidelines to personal characteristics. It refers to race, belief and cultural background, but personal characteristics are then defined very broadly to include all personal characteristics. The guidelines, as has been pointed out, already contain references to other personal characteristics as well as race, belief and cultural background, some of which are protected characteristics under the Equality Act. Is it the Government’s intention by this Bill to require the Sentencing Council to remove all those existing references to other personal characteristics, even if they are protected characteristics, as indeed are race and belief, under the Equality Act?
Lord Ponsonby of Shulbrede (Lab)
I thank the noble Lord for that question, and I recognise its complexity. That is why my right honourable friend wants to look at this question in the round, because the point he made is correct. I do not want to anticipate what the answer to his question will be, but nevertheless I acknowledge the complexity that he has pointed out.
Baroness Fox of Buckley (Non-Afl)
My Lords, I commend the Justice Secretary and, indeed, the Opposition for agreeing on the need for legislation on this matter. Does the Minister agree that, as illustrated perhaps by many of the comments that we have already heard, the guidance on pre-sentencing reports or differential bail et cetera, which is designed by an unelected quango, is not the place to pursue wholly political and often divisive and contentious policies around identity, whether it is race, ethnicity, faith, transgender and so on? It is just not the right place for it to happen. Is not the problem a bit broader in that whenever an unelected quango, such as the Sentencing Council, acts in defiance of Parliament, it undermines public trust in democracy, not just in the courts? That is why I am glad the Justice Secretary acted at last.
Lord Ponsonby of Shulbrede (Lab)
I thank the noble Baroness for her support.
Lord Thomas of Cwmgiedd (CB)
My Lords, I do not think there is any dispute whatever about the principles upon which judges should sentence. Most of them are laid down in the Sentencing Code, and there is absolute agreement on equality before the law. I also think everyone recognises the achievement of the Sentencing Council in going a long way to achieve consistency and to educate the public in understanding the way in which sentencing operates, but—and I do this without wishing to enter into the political debate—we find ourselves constrained by resources, and when resources are tight, problems arise. Therefore, I greatly welcomed the Lord Chancellor saying yesterday in the other place that she would make more resources available to the Probation Service.
However, my experience has been twofold. First, we have a constitution that operates on a degree of partnership between the Lord Chancellor and the head of the judiciary, the Lord Chief Justice. Secondly, at times when resources are tight, people forget that our whole constitution operates on interdependence, not just independence, between the different branches of government. I hope that we can follow the example of the late Lord Judge and Mr Straw, who together crafted this legislation—I was there when it happened. There will be disagreements. I see with pleasure that a former Lord Chancellor is in his place in the Chamber. We used to discuss things often. Unsurprisingly, we did not see eye to eye on everything but we managed to find a way forward. Can the Minister assure us that everything will be done to try to make this work in discussion, in partnership and in keeping this whole thing out of politics, which is so destructive to the independence of the sentencing process?
Lord Ponsonby of Shulbrede (Lab)
I thank the noble and learned Lord for his wise words and his analysis. Of course I acknowledge the point he made about resources. I earlier pointed to the discrepancy between youth and adult pre-sentence reports. The fact of the matter is that it is a resource issue. This is one very specific example, but the noble and learned Lord’s general point is absolutely right.
The other point the noble and learned Lord made about the interdependence of judges and the political leadership, if I can put it like that, as well as the independence, was also right. Protecting that is very important. Nevertheless, we believe that this example of the way different ethnic groups should be addressed within sentencing guidance is a policy issue. That is why my right honourable friend the Lord Chancellor has acted as she has in introducing this specific and targeted Bill. Nevertheless, the more general point that the noble and learned Lord makes about the importance of partnership and discussion is right. I thank him for making those points.
Baroness Butler-Sloss (CB)
My Lords, may I respectfully agree with every word that the noble and learned Lord, Lord Thomas, said, and ask a practical question? We have heard that there are likely to be more probation officers and more resources. Does that mean that judges and magistrates will have the opportunity to ask for more pre-sentencing reports?
Lord Ponsonby of Shulbrede (Lab)
The short answer is yes. We are certainly recruiting more probation officers, as I said in answer to an earlier question. Of course, judges are already 100% free to order pre-sentence reports, but we want to build up the confidence, if you like, of judges and magistrates in the Probation Service so that more reports are ordered. It is quite likely—I think there is no secret here—that there will be greater use of community sentences and suspended sentences in the future, and we need to work towards that. One way to do that is rebuilding the Probation Service, which was so badly damaged by the previous Government.
Lord Grayling (Con)
My Lords, I pay tribute to the noble and learned Lord, Lord Thomas, who was a wise partner to me in my former role. He is absolutely right about the need for partnership between the judiciary and politicians. They have different challenges but, none the less, they need that collaboration. The current situation is clearly regrettable. I simply urge the Minister and his colleagues not to rush the solution to the problem. Let us get this right, rather than doing it in a hurry and getting it wrong.
Lord Ponsonby of Shulbrede (Lab)
I thank the noble Lord for that point; he is absolutely right. There is a specific problem, and a Bill is currently before the House of Commons. I do not know the timetable for that Bill and I will not speculate on it, but the noble Lord is clearly right that we need to get it right.
Lord Paddick (Non-Afl)
My Lords, do the Government understand why a pre-sentence report is more likely to discourage a judge from sending an offender to jail? Does the Minister believe that the result could be more accurate or appropriate sentences being handed down as a result of a better-informed sentencing decision? If he does, what is wrong with encouraging judges to ask for pre-sentence reports in such cases where, historically, sentences appear to have been disproportionate?
Lord Ponsonby of Shulbrede (Lab)
I agree with the noble Lord’s point. As I pointed out, I ordered these reports hundreds of times in my previous role, and I invariably did it so that the sentencing bench could make a better-informed decision. The only times I did not do it were when I could see no alternative to custody. Of course, the same situation applies now as before: any judge can order a pre-sentence report at any time. The mischief and the problem that my right honourable friend had was the perception that if particular racial groups were more likely to get a pre-sentence report, there could be a political attack—indeed, there was a political attack—that this meant that they would be less likely to be sent to prison. She saw the perception of that as the mischief, and it was the reason she brought forward her Bill. She wants to find a different way of addressing the fundamental problem, which is the disproportionality within sentencing outcomes.
Lord Lemos (Lab)
My Lords, I should declare my interest, as I was the lead non-executive director of His Majesty’s Prison and Probation Service from 2018 to 2025. Will my noble friend reassure the House that resources will be made available for the Probation Service, which, as he rightly said, suffered terribly under the previous Government and has been reunified into a national Probation Service only in the last few years? Will he reassure the House that resources will be found not only to improve the quantity and quality of pre-sentence reports as necessary but to increase the use of community sentences, which he referred to and which we hope will be the case following the review of sentencing by David Gauke? Lastly, will he reassure the House that this row, if I may call it that, does not influence too much the way that David Gauke’s recommendations are considered?
Lord Ponsonby of Shulbrede (Lab)
Yes, I can give my noble friend all the reassurances that he seeks. I share the objectives that he alluded to. Clearly, we want a greater quantity and quality of pre-sentence reports. The review being undertaken by David Gauke will be far more wide-ranging. We wait to see the specific details that it will bring forward but I very much hope that this specific issue, which is dealt with in the Bill currently before the House of Commons, will have a minimal impact, if any, on the recommendations of the Gauke review.
Farming and Rural Communities
(1 day, 5 hours ago)
Lords ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
Lord Roborough
To move that this House takes note of the impact of the Government’s economic and planning measures on farming and rural communities.
Lord Roborough (Con)
My Lords, I draw attention to my interests as a dairy farmer; landowner; forester; natural capital, residential and renewables developer; and investor in natural capital businesses Cecil, Circular FX and Agricarbon and other farming-related businesses such as Deere, SLC Agricola and Anglo-Eastern Plantations. I am most grateful to my parliamentary party for making the plight of farmers and rural communities a top priority and allowing time for this debate today.
The list of negative spending and taxation decisions by this Government on farming and rural communities is long. The cumulative impact is devastating on the financial and mental well-being of farmers in particular but also the wider rural community. The reduction in inheritance tax reliefs under agricultural property relief and business property relief remains a hugely emotive and damaging subject. We remain puzzled why this was necessary, given that the Treasury expects to raise only £500 million per annum, and it will be only a transitory gain as tax-planning options remain open to reduce or eliminate this exposure, as Government Ministers have themselves conceded.
A small cohort of currently elderly farmers, sufferers of serious illness or victims of mortal accident will be caught by this capricious decision. There is a high risk that those who reasonably assume that they would not live either for the seven years needed to time out potentially exempt transactions, or even the four and a half years until the next election, will take the timing and manner of their death into their own hands. I have asked repeatedly whether the Government will keep and publish timely data on suicides by farmers and family business owners in the run-up to the reduction of these reliefs and have received a negative response each time. Will the Minister review this denial?
It seems particularly cruel that the £10 million mental health support fund for farmers has been shelved, despite the noble Lord, Lord Livermore, suggesting that mental health support is there for farmers should they consider taking control of the timing of their deaths. The massive reduction in delinked payments, which will be subject to a regret Motion later this month, as well as the abrupt closure of the sustainable farming incentive scheme, leaves many farmers in a dreadful position. Those who were trapped in the long-term higher-level or Countryside Stewardship schemes and unable to access sustainable farming incentives are hit with the delinked payment reduction without any offset. Those who were counting on new SFI income this year to replace old schemes that had ended are even harder hit. This does not appear to be a way to run a Government, whereby decisions are made that lead to considerable unfairness in outcomes and the unlucky lose financial viability.
In answer to my Written Question, the Minister replied:
“We remain committed to investing £5 billion of funding in the farming budget this year and next … We are on track to spend all the funding that is available”.
This seems hard to square, given that the National Farmers’ Union estimates that £400 million was saved by the steep reduction in delinked payments, yet only a few months later SFIs are cut off at a moment’s notice. Evidence given to the EFRA Committee by Defra Ministers and officials appeared to suggest a deliberate intention to ignore the six weeks’ guidance. Can the Minister also assure us that the £200 million investment in the Animal and Plant Health Agency’s Weybridge laboratory is not coming out of the farming budget? I wonder whether she is also able to tell us how much of that farming budget actually ends up in the hands of farmers, not in administration or projects run by others, and not in infrastructure nor arm’s-length bodies.
The £100 million rural service delivery grant being redirected to deprived urban areas, despite the widespread rural issues and the higher cost of living in rural areas, perhaps signals where this Government’s focus is. Farmers are having to contend with these capricious decisions and their often life-changing impacts while also dealing with massive inflationary pressures, low grain prices and increases in employers’ national insurance contributions and minimum wages. It has been suggested by the Government that the new SFIs that are planned are likely to require the land use framework to have been published. The Minister has indicated in a reply to my Written Question that
“the publication of the Land Use Framework”
will be
“this year. A timeline for publishing the Land Use Framework will be set out in due course”.
Could she confirm whether the publication of that framework will be necessary prior to the publication of new SFIs and what that might mean for their timing? A department official has suggested in front of the EFRA Committee that details of future SFIs would be with us in July. Can she confirm that?
The second prong of the attack on farmers and the rural community comes from planning, whether by displacing agricultural production on prime agricultural land with solar farms and other energy infrastructure, or the enhanced compulsory purchase order powers in the Planning and Infrastructure Bill. We on these Benches are broadly supportive of the Government’s housing ambitions, but there is no reason why they need to come at the expense of the rural community.
Land-owning farmers are threatened with compulsory purchase of their land at values that do not represent market value, as the value of alternative uses will be disregarded. Taking part of a holding often undermines the viability of the whole and, while the price paid may reflect the agricultural value, that is unlikely to be enough to replace that land locally—even if such land is available. It is hard to understand what is wrong with the current valuation framework that ensures fair payment for land. It is also hard to understand how this can be consistent with the ECHR on confiscation, as the Government claim on the face of the Bill.
Further to this, the role of Natural England becomes terrifying. As drafted, the Bill confers enormous powers on Natural England to CPO whichever land it chooses to fulfil its environmental delivery plans. Why does Natural England need these powers? Why can it not simply offer to pay landowners to carry out the work or deliver the services that are intended in these EDPs? Surely, there is a choice of sites where such work can be undertaken and that can introduce competition in service delivery while allowing value to be delivered in the EDPs. I fail to understand how nature restoration levies can possibly be well used by Natural England to CPO land as it sees fit. It has not been necessary to nationalise sites of special scientific interest to protect them. Just how large should we expect these nature restoration levies to be?
We on these Benches fundamentally believe in reducing the size of the state. However, capricious short-term spending and taxation decisions are not the way to do it. We want to see a vibrant rural economy, financed by fair payment for the public goods being delivered, as well as the traditional food and timber outputs from rural land. We see numerous ways of delivering this—but without killing the patient before the cure is administered by withdrawing funding before a replacement is available.
When will the Government make a decision on the inclusion of woodland carbon units in the emissions trading scheme? The noble Baroness has previously said “in due course”, but the consultation was launched last summer and surely cannot be very complex. The additional financial incentives would encourage new tree planting to meet and even exceed targets. Our climate is perfect for healthy, vigorous establishment and growth in trees. Our target of 16.5% tree cover, as I have previously said from the Back Benches, is unambitious, and our progress even to that is very disappointing. Trees capture significant quantities of atmospheric carbon, replace high-carbon emissions materials in building, reduce peak flow rates in flood events, help to purify water and benefit biodiversity. Surely, we must do everything in our power to increase this tree cover. The Government’s own chief executive officer of the Forestry Commission, Richard Stanford, eloquently explained these benefits to the APPG on Forestry and Timber Security, as did the Woodland Trust team to the APPG on Woods and Trees.
When can we expect mechanisms to allow water companies to pay for the flood mitigation and water quality improvements that regenerative farming, peatland restoration and new woodland planting deliver? When will action be taken to solidify the strong position of the woodland carbon code and the peatland carbon code by certifying them under the Integrity Council for the Voluntary Carbon Market? How will the Minister incentivise the private sector to pay for nature restoration and biodiversity protection and improvement? Surely the planning Bill is a golden opportunity to move forward on this, beyond our own biodiversity net gain measures on a larger scale. Why are we squandering this opportunity by giving it to Natural England? Would the Government consider tax incentives to encourage private investment in nature restoration, or even changing the rules on bidding for government contracts to require companies to invest in it?
Farmers and the wider rural community deliver unquantifiable value to our country; feeding us, protecting and restoring nature, sequestering carbon, growing timber to displace the 73% that is currently imported, protecting our archaeology, looking after our fresh water, maintaining our countryside for access and removing litter. Most of these public goods are not paid for at anything like their true value—if at all. This is simply not sustainable for the rural community. For the farming and rural community to move forward with confidence, existing spending commitments cannot be changed overnight and random new taxes imposed. The rural community needs confidence that this Government are committed to ensuring that these public goods will be paid for. I very much look forward to the insights of all other noble Lords in this debate and the Minister’s response. I beg to move.
Lord Davies of Brixton (Lab)
I look forward to this debate and thank the noble Lord, Lord Roborough, for introducing the issues that clearly need to be addressed. I look forward to my noble friend’s response. I am a sort of bookend in this event. I have come as much to listen and learn as to provide definitive information.
I am not a farmer—my father decided that he did not wish to take over the family farm; he was a qualified chemist—but, because of that farm, to a limited extent I feel I have a sense of the cultural hold of being from a farming background. I still occasionally visit the land that was ours and feel a sense of attachment—so I get that. It is important that government policies recognise the cultural content of farming and agriculture. In general, however, what we need are economic and planning decisions that support farming practices that deliver benefits for food production, biodiversity and climate resilience, while at the same time maintaining the countryside that we all know and love.
I thank various organisations and the Library for their helpful briefings. They include the Nature Friendly Farming Network, the World Wide Fund for Nature UK and the Campaign to Protect Rural England. I assume that there are parallel organisations in the other nations of the UK. They all emphasise the vital role of public funding, planning and infrastructure in creating and maintaining thriving rural landscapes while meeting our shared environmental goals and, not least, in achieving a successful and thriving agricultural industry.
In introducing the debate the noble Lord, Lord Roborough, outlined a number of major concerns, including the compulsory purchase of land to meet our housing targets. Clearly, this has to be undertaken in a way that does not work against the general objectives that I laid out. The issue of what should be paid for land—the enhanced market value with planning permission for housing, or its value as agricultural land—is important and I fully support the Government’s approach to that.
The most contentious issue has been the inheritance tax reforms. In any debate on this issue, you have to recognise that the problem has been created by the inheritance tax system. In general principle, I see no reason why particular groups should be absolved from their responsibility to pay part of their wealth following their death, to the general good. I support the concept of inheritance tax, and I do not see any reason in principle why the agricultural industry should be exempt. However, going back to the point I made earlier, the cultural significance of the family farm is a real factor and any changes we undertake have to recognise that.
Those who have read the financial pages over many years will know that there is a general view that inheritance tax is a voluntary tax and, in order to avoid it, you have to make changes to the way history and tradition have required farmers to behave. That will take time to adjust to, but we have asked many other communities to make cultural changes, and I see no reason why farmers should be exempt from that objective.
I support the Government’s farming initiatives, and I look forward to the publication later in the year—I hope my noble friend will cover this—of the 25-year farming road map. I look forward to hearing other speakers.
The Lord Bishop of St Albans
My Lords, I too am grateful to the noble Lord, Lord Roborough, for securing this debate and for his excellent opening speech. I declare my interests as president of the Rural Coalition and a vice-president of the Local Government Association.
I have already spoken in your Lordships’ House on changes to the agricultural property relief and business property relief, so my views are already recorded in Hansard. I lament the sudden closure of the sustainable farming incentive, and the reforms to compulsory purchase in the Planning and Infrastructure Bill.
If your Lordships’ House will indulge me, I want to focus on two associated areas which are pertinent to this whole debate. First, the rural economy has great potential to contribute to the economic growth that is needed. I think we all believe in this; it is just a matter of how we achieve it. Secondly, I will make a few comments about the almost complete lack of strategic rural policy or effective rural-proofing in government decision-making.
It is very easy for us to sit here and talk about the things we do not like—we spend a great deal of time doing that—but I am proud to be president of the Rural Coalition, which has tried to work alongside government over many years to put some positive ideas, initiatives and facts and figures on the table to help us achieve the growth in the rural economy that we believe we need.
I want to mention the Pragmatix report that we commissioned, and which some noble Lords will have read, entitled Reigniting Rural Futures. This report evidences the extraordinarily large productivity gap between rural and urban areas and the billions of pounds that are lost through chronic underinvestment in rural infrastructure and services. We made an economic case that, with the right policies in place, the rural economy could contribute up to an additional £19 billion in tax revenue for the Treasury. That would, of course, mean addressing the digital divide, rural transport, access to banking services, the rural affordable housing crisis and fair funding for rural local authorities. Yet none of His Majesty’s Government’s policies in these areas mentions or accounts for the needs of rural communities.
Despite 1,254 respondents to the question about rural affordable housing in the NPPF consultation, the Government have provided no guidance on the delivery of affordable housing in rural communities. The Planning and Infrastructure Bill also misses the opportunity to implement changes to help deliver small rural housing sites. The Bus Services (No. 2) Bill, which contains many good provisions and for which I am very grateful, needs to implement cross-subsidy between rural and urban areas to account for the additional costs generated by sparsity.
This year’s local government funding settlement once again leaves rural local government underfunded, with urban areas receiving 40% more per head in government funding spending power than their rural counterparts. This comes on top of the additional costs of delivering services due to sparsity. I urge His Majesty’s Government to address these issues in their review of the funding formula, to recognise that density of deprivation is not the only factor that affects the costs of service delivery, and to level per capita spending power across rural and urban authorities.
The word “rural” is not mentioned once in the industrial strategy Green Paper. From a series of Written Answers, I can only conclude that the rural industry is not really being considered in the Government’s drive for growth. What a waste. The Government urgently need—indeed, it is vital—to develop a coherent rural strategy and ensure that all policies across the board account for and involve rural communities. If these communities are left behind again—20% of the population live in rural areas and over 500,000 businesses are registered there—we will all be the poorer for it and the entire nation will lose out.
Baroness Shephard of Northwold (Con)
My Lords, I congratulate my noble friend Lord Roborough on calling this debate. It is, as ever, a pleasure to follow the right reverend Prelate, who brings a depth of knowledge and experience to this subject.
It is right that the Government be held to account for the seemingly reckless way in which they are dealing with the farming industry and rural communities. As the right reverend Prelate said, they are home to nearly one-quarter of our population. The other issue I wish to raise is the danger to our food security at this unprecedented moment for global trade.
The Labour manifesto promised to champion British farming. Instead, from the farmer’s point of view and the point of view of rural communities, Labour seems to have launched a series of crippling blows on farming, starting with the Budget changes to inheritance tax for farmers. That is going to cripple British farming and prevent investment and growth in the rural communities.
The noble Lord, Lord Davies, raised a really interesting point about assets and their taxation. I certainly believe that the so-called assets of land, machinery and livestock are not an indication of farmers’ wealth but the essentially means for them to earn a living. You cannot have a farmer without him owning or renting land. They care for 70% of our countryside and grow 60% of our food, as has already been mentioned in the debate.
I do not want to blame the Minister; I never do. She and I know where the real culprit lies, but the effect for farming and the rural community is the same. The latest bombshell was dropped on 11 March this year, with 30 minutes’ notice, announcing that the sustainable farming initiative was closed to new applications. This was at a moment when many farmers were still preparing their applications, having been assured by Defra that if there was to be any change in the procedure, six weeks’ notice would be given—another broken commitment.
The SFI was launched in 2017. It had all-party support. Its purpose was to help farmers transition from straight subsidies to grants for introducing more sustainable methods. In 2022, Daniel Zeichner MP—then shadow Minister for Agriculture—castigated the then Government for dragging their feet, demanding a commitment to long-term funding for it and a guarantee that goalposts would not be moved. Daniel Zeichner MP is now the Minister for Agriculture in the other place, and I am not sure what he is saying now. Have the Government scrapped the SFI? Do they intend to? If so, what is to replace it?
I hope the Minister will be able to enlighten us on that and, in particular, on how the Government plan to support our agricultural productivity and resilience when climate change, environmental insecurity, geopolitical events and now in particular tariffs make the whole issue of our food security a major concern. On the day after “liberation day”, will she be able to explain to noble Lords how her Government propose to deal with tariffs if, as seems likely, they will affect agriculture? Was Nigel Farage MP telling us something when he said last week that he welcomed the import of chlorinated chicken?
If the Government are planning for such eventualities, why, by their taxation and other policies already raised by noble Lords, are they reducing farm incomes, prosperity and growth in our rural communities? They should be supporting the vital stability of our food security, not diminishing it. I hope the Minister can reassure the House. She always listens carefully and takes note of the argument. Dare I wish her a happy Easter?
Lord Grayling (Con)
My Lords, it is a particular pleasure to follow the noble Baroness, Lady Shephard, and to very much agree with what she said about food security. I congratulate my noble friend Lord Roborough on securing this debate.
Underpinning what the noble Baroness, Lady Shephard, said about the need for food security is the need to see a clearer strategy for our countryside, our farmers and our rural communities. We have seen none of that so far since this Government took office, and we desperately need it right now because, as the Chancellor rightly said last week—one of the few sensible things she has said recently—the world has changed. We cannot be certain that we will always be able to import all the food that we need. We cannot be certain that we will not see a further period of geopolitical instability. Therefore, the need to protect in particular our most productive land in this country is of paramount importance.
Right now, we are trying to grow our food, generate our electricity, protect our nature and build our houses all in the same land spaces. We cannot do it in a haphazard way; it has to be done carefully, strategically and thoughtfully. So the first thing I say to the Minister is: please can she and her colleagues in government work this through in a much more careful way than has happened up to now? There are some very practical examples. We should not, for example, be building solar farms on our most productive agricultural land. There is clearly a place for solar power in this country, and there is a lot of land that is of second-degree or third-degree usefulness, where there is a genuine opportunity to do more with it. But we should not use our most productive land for this purpose.
Likewise, there is a need to build more housing, but the easy option for housing development is always just to build new houses on greenfields, which is by far the easiest option for developers—but we should not be taking the easy option. There are plenty of avenues in this country for us to pursue smarter urban development. It is a matter of great regret to me that this Government do not seem to believe in urban development as a core part of meeting the housing needs of the future. The targets for our big city areas have not risen in anything like the same way as the rural areas, the areas on the fringes of our cities and the areas of green-belt land. I saw this in my former constituency, where there is a real opportunity to build on brownfield land and to densify the developments already there—not just to build on the green spaces.
There is also the very important task of restoring our biodiversity, which I believe the current Government, like the last one, want. We have to be smart about how we do that as well. There are disappointments in the Government’s approach to our farmers. The previous Government were right—although they did not get the detail right—to try to empower our farmers to do more to protect the countryside of which they are stewards. I do not see the way in which the current Government are approaching things such as the SFI as reflecting an understanding of the role that farmers can play. There really has to be a more holistic, more strategic and more thoughtful approach to how all this happens.
I will make one point in particular to the Minister. It drives to the heart of the question of how planning goes forward in our rural areas, whether it is about housing or onshore wind—I am not a great fan of onshore wind, but the Government have taken the decision to pursue it—and how all that fits with the challenge of restoring biodiversity. It is the issue of corridors for nature. We have to understand that whether it is wildlife on the ground or birds in the air, putting development in the wrong places has a materially negative impact on nature’s ability to recover. So my final point is: as the Minister works with her colleagues in MHCLG and across government, as they set guidance for local authorities and as they put in place all the different measures they are looking at to drive growth in energy and housing, it is of paramount importance that they also reflect the realities of local nature recovery. If we do these things in the wrong places—if we erect wind farms in the middle of bird migratory routes or if we build housing estates in the middle of migratory routes for species on the ground—we will go backwards, not forwards. What we need from this Government is a holistic strategy. So far, sadly, we have not seen it. I hope the Minister can deliver it pretty soon.
Lord Kakkar (CB)
My Lords, I join other noble Lords in congratulating the noble Lord, Lord Roborough, on securing this important debate and on the very informative way in which he introduced it. I do not come from a farming or rural background, but the territorial designation that attends my peerage is a small hamlet in Mid Devon, Loxbeare, where my father-in-law is a sheep farmer. Over the past 35 years, I have come to understand in some way the powerful communities that exist in these small farming areas, and I have come to greatly respect them.
His Majesty’s Government have a range of economic policies, and they will inevitably impact all parts of the country, including rural areas. But the impact of policy on health outcomes, and population health outcomes in particular, is frequently neglected. We know that in rural communities, health outcomes differ. There is an assumption that because the countryside is beautiful and people can get out and about, they will in general be healthier and live longer. But there are substantial disparities in outcomes. We have heard of the higher suicide rate experienced in farming communities in comparison with many urban communities, but there are also disparities in other health outcomes and, importantly, there are inequalities in access to healthcare facilities.
For instance, 51% of rural populations live over an hour’s travel distance from their closest hospital, compared with only 8% of urban populations. Some 43% of rural populations are within half an hour’s walk of a general practice or primary care facility, compared with some 95% of urban populations. So there is inequality of access. Ambulance waiting times can be longer; pharmacies are more sparsely distributed; and, most importantly, dispensing pharmacies in rural locations frequently have less stock of medicinal products, so individuals have to travel much longer distances to get their medicines. These are all important problems with regard to access.
There are also concerns about accessing clinical services in acute situations. The time from onset of symptoms to intervention for patients with acute myocardial infraction and acute stroke is critical in terms of achieving the best clinical outcomes—yet frequently patients in rural locations experiencing those conditions have to wait longer to achieve those interventions. This problem extends to management of chronic conditions, particularly troublesome when there are long distances to travel for those who, for instance, receive daily fractions of radiotherapy to manage their cancers.
All this suggests that there must be a very clear focus in terms of planning considerations, when taking forward economic and other policies, to ensure that we can achieve equitable outcomes for those living in rural locations, as we do for those living in urban locations, with regard to the provision of healthcare. We are about to experience a major reorganisation of the NHS in England. The Government have set three clear priorities: a move from hospital to community care; a move from analogue to digital care; and a move from treatment to prevention. But for all those transformations to apply equitably in rural as well as urban locations, there needs to be very careful consideration of the specific needs in rural locations to achieve those policy objectives.
Can the Minister confirm that, in taking forward and understanding an assessment of the impact of various policies—economic, planning and other—with regard to impacts in rural communities, or for rural communities, there will be proper consideration of the impact on achieving health outcomes? Most important, in terms of economic policy, is the impact on the social determinants of health—housing, education, jobs and so on—which are the most important determinants of the health outcomes for those communities.
Baroness Coffey (Con)
My Lords, I thank my noble friend Lord Roborough for having introduced this debate. His eloquent speech at the start was full of detail and excellent suggestions on how things could be better if the Government listened. I try not to get too political in these debates, but I am conscious that, while the Minister is from a very rural area—a magnificent part of the country—it is worth noting that all the Commons Ministers represent urban areas. That is why I feel that there has been a lack of consideration and true understanding of some of the impact of recent decisions that have been made on the farming community but on rural communities too.
There is often an assumption that rural communities are wealthy, but that is simply not the case. The right reverend Prelate the Bishop of St Albans talked about rural strategy. A couple of years ago, the previous Government produced something called Unleashing Rural Opportunity. It was the one time I was able to get a map into a particular document showing that contrast and challenging other Ministers at the time but also the country as a whole to see how stark the variation is.
So what can be done? Unfortunately, confidence is now trashed by not only the actions but by the proposals to be made—particularly in the Planning and Infrastructure Bill. I am sure that we will debate it at length when it arrives in this place, but I hope noble Lords understand quite how bad this has got. When we think about the relationship—the unfortunately regrettable relationship—that Natural England has with a lot of our farming community, for it to be given powers to compulsorily purchase land means not only putting it in the wrong hands, because, if anything, it should be done by the Secretary of State, potentially delegating, but it completely destroys the nature markets framework and the approach of bringing private finance into the sector. Just last week, Steve Reed, the Defra Secretary, was right to praise the standard that has come out to open up this market, building on work from two years ago. It is great that we have finally got there, but the Government do not see the irony that giving powers such as this begs the question of why farmers should be bothered to get involved now in the first place.
When we come to debate the SI in a couple of weeks’ time, after the Recess, we can get more into how the money is being spent—and I am conscious that, with the change in paying farmers away from the guaranteed fixed payments there was always going to be a sort of see-saw when that moved over. People might not initially take up the proposals but they would understand, learn and commit—and we have seen the huge level of commitment. I genuinely hope that farmers are making complaints to the department, because I believe that serious maladministration has been done by pulling the plug against an expectation—and not by going through judicial review but by going straight to the department and the ombudsman.
We need farmers. We need landowners and rural communities to help not just with food production but with the future of our planet. It is about the topsy-turvy difficulties with which they are living—and our farmers are the original friends of the earth. Yes, there have been some really poor farming practices, which we have later recognised, which have now been changed. But we need to bring those people with us.
On one other point that I wanted to make, on housing, I am concerned about the proposal to adjust some of the planning decisions. Noble Lords will find that most councils are not nimbys, but when they are faced with an 82% increase for housing in east Suffolk and no changes in London, where the housing demand is really strong, that will put pressure on not just the fields but the villages and those small communities. By the way, at the same time, housing associations are flogging off the houses in those villages so that they can release capital to build more houses, they say, but they are doing that 60, 70 or 80 miles away—very close to the new areas of growth. It is just ridiculous.
There are other things that worry me about council officers taking decisions, when local plans have already set the housing densities and all of a sudden developers come along and say that they do not want to build at that density any more. What councillors and Ministers are not realising is that as a consequence even existing targets are going to take two or three times the amount of land to build the houses that are already there—so just imagine now being expected to double it.
We are in a difficult time, and I know that the Minister is very much a champion of rural areas. I genuinely hope that she can persuade the rest of the Government to be so too.
Lord Harlech (Con)
My Lords, it is a great pleasure to follow my noble friend. The House is enriched by the knowledge and experience that she brings to your Lordships’ Chamber. I declare my farming and land management interests in Wales and congratulate my noble friend Lord Roborough on securing this crucial debate.
Since the general election, we have seen policy decisions that have actively harmed the agricultural sector, undermined rural prosperity and jeopardised our nation’s food security. The Government’s election platform promised to support farmers and stimulate rural economic growth; instead, their policies have betrayed those commitments, leaving many farming businesses struggling to survive. A prime example of this is the sudden and shocking closure of the sustainable farming incentive. That move, made without consultation or warning, has left thousands of farmers in limbo. Many were in the midst of applications, investing time and resources into what was meant to be a stable scheme. Now they find themselves excluded, with no viable alternative, forced to return to more intensive farming methods—in direct contradiction of the UK’s environmental goals.
Take, for example, Richard, a dairy farmer from Cumbria. He had spent months preparing his SFI application, carefully planning to transition his farm to more sustainable practices. When the scheme was abruptly closed, he was left with no support and his business is now at risk of collapse. He may have no option but to sell off part of his herd just to survive.
The Country Land and Business Association, alongside CBI Economics, has provided alarming projections that the changes to APR and BPR could shrink UK gross value added by nearly £15 billion by 2030, eliminate more than 208,000 jobs and, paradoxically, reduce tax receipts by almost £1.9 billion. For individual farming businesses, this means an average loss of nearly 10% of turnover, a 15% drop in investment and an 8% reduction in staff. These are not mere numbers; they represent family-run farms being forced out of business, young farmers unable to inherit land and a bleak future for British agriculture.
Emily, a young farmer from Yorkshire, had been preparing to take over her family’s arable farm, but the proposed changes to APR and BPR mean she now fears that inheritance tax will make it financially impossible. She said her family has worked the land for generations, but this may be the last. The Government say they would support her, but their policies say otherwise. The Government remain silent on this disaster, refusing even to open a consultation on these damaging changes. That is unacceptable—the Government must engage with industry stakeholders to find a fairer approach, such as a clawback mechanism, that does not threaten the survival of farming businesses across the country.
The healthcare perspective on this debate, which we heard from the noble Lord, Lord Kakkar, was fascinating. It is often absent when discussing rural issues.
Several noble Lords have mentioned housing. Rural Britain is in the grip of a housing crisis, with young people unable to afford homes in the communities in which they grew up. Small-scale development could address this crisis while supporting local economies. Instead, as my noble friend Lord Grayling outlined, the Government’s proposals focus on empowering combined authorities to develop vast urban projects, while failing to equip local councils with the resources they need to approve modest, essential rural housing. Furthermore, the reforms inexplicably excluded national parks, further isolating these communities from economic opportunity.
The message from rural Britain is clear: this Government’s policies are failing it. What good is a 25-year plan if you do not know how you will survive the next six months? The farming community is being taxed into oblivion, environmental goals are being undermined and economic growth is being suffocated by bureaucratic inertia. If the Government are serious about their rural commitments, they must take immediate action—reinstate the sustainable farming incentive, rethink inheritance tax relief changes, introduce fairer planning policies and protect farmers from unjust compulsory purchase powers.
Our farmers and rural communities are the backbone of this country. They deserve better. I urge the Government to listen, consult and act before it is too late.
Lord Elliott of Ballinamallard (UUP)
My Lords, I thank your Lordships for the opportunity to take part in this important debate. I declare an interest as a farmer in Northern Ireland.
I have been very interested in some of the discussion so far. I know and appreciate that the Minister has agriculture, farming and rural communities at heart. But we must grasp the nettle here and start recognising that the farming community provides the food on our table, provides society with jobs and is the one economic base in this country consisting of price takers, not price makers. We do not have the opportunity to set our own price for products—that is done by others. If I go and buy a product in a shop, that price is set and I have to pay it. When we produce our milk, beef, sheep or wheat, we have to take whatever price the next part of the food chain gives us. We do not have that opportunity.
I was very interested in the assertion by the noble Baroness, Lady Coffey, around compulsory purchase. I will give an example. Some of my contribution is about Northern Ireland but some of it is broader. In Northern Ireland at that moment, 85 kilometres of new dual carriageway is being developed on the A5 road. Farmers and landowners have had that land vested for months and have not even got an offer of a valuation for it. Is that fair or reasonable? Those farmers cannot plan for their future. They do not know whether they will have the use of that land this summer to produce their food stocks. They have no idea; that is totally unfair.
I have talked to other farmers in a similar position who lost their land six years ago by vesting for a road scheme and who still have not got a penny. It is totally unfair and unreasonable. How would anybody here like it if their vehicle was impounded by the Government, used for their purposes and not paid for?
We must recognise the significant input that the farming community and rural communities make to the economy. I was taken by the noble Lord, Lord Kakkar, and the issue around health. I come from County Fermanagh, where we have one state-of-the-art hospital. It has been open for only 12 years but we have theatres and beds in it that have never been used because we cannot get the health professionals to come and live in the rural areas. There needs to be a change in attitude, policy and direction.
I have listened to some of the issues around financial support for the farming community, but it is not always financial support that the farming community wants; it is support in government policy as well. One aspect I will highlight is that where there are opportunities to improve animal housing—livestock housing—and to build modern, state-of-the-art housing, we in Northern Ireland are broadly not permitted to do that if we are within 7.5 kilometres of a European-designated site. That prevents us doing it. It does not matter what level of audits, surveys and assessments are carried out. If we are not meeting the targets, we cannot even replace it with housing that would be much better for the environment and have far lower greenhouse gas emissions. We are still not permitted to do it. Farmers need those types of policies, not just financial support.
Clearly, living in a rural area can be difficult for services. We have mentioned health services. I know that in one village—it has changed now, to be fair—we had one bus service per week, from the main town in Enniskillen out to that village and back on the same day. If you missed that bus, you had to wait a week to get the next. That is going a bit far, but your Lordships understand what I am saying. A good level of services is just not provided in the rural areas.
I know there is a climate change debate this afternoon and I do not want to encroach on that too much, but sometimes I believe that there are people and communities in this society who would rather we imported all our goods instead of producing our own, because that might mean we can hit our climate change targets more easily. That is not the case for me. I want us to produce them locally and to a better standard than others.
The Earl of Shrewsbury (Con)
My Lords, I congratulate my noble friend Lord Roborough on securing this important and timely debate. I declare interests as a member of the Game Conservancy Trust, now the GWCT, and a retired member of the NFU; both my sons work in land management and agriculture.
The recent news flow from this Government has created considerable concern and uncertainty in rural communities—in particular, in those dependent on farming, both directly and indirectly, for their livelihoods. The Government should also be concerned, as uncertainty at home, in combination with the challenges posed by trends in global markets, means that many farmers will need to intensify production to make ends meet.
While in the past direct subsidy support of the farming sector could be criticised for preventing innovation in farming practices, the new environmental land management scheme, of which the sustainable farming incentive is part, was a very different approach. This scheme was based on the premise of public money for public goods. These public goods are now often embedded in legislation, such as the target for nature recovery in the Environment Act. The withdrawal of the SFI, with no commitment to its resurrection until after the spending review in June, is therefore a very big concern, as it potentially undermines the Government’s ability to meet their 2030 target to halt the decline in species abundance, to which we are committed under international agreements.
Many farmers chose to go into mid-term Countryside Stewardship back in 2020 when the new ELMS was being created, in order to achieve some certainty in support for their environmental endeavours. Many of these farmers would have been early adopters of Countryside Stewardship schemes, having understood the importance of being enthusiastic contributors to supporting biodiversity on the farm. As a result, when their mid-term schemes finish at the end of this year, they will face the real risk of a gap in support for the measures that are already in place and delivering public goods for public money.
Given the domestic and international economic backdrop for farmers of rising costs and falling incomes, they are likely to opt to focus on food production and revert land currently given over to support pollinators or protect watercourses back into crops, which can be sold to bring in income. This will not only impact on species abundance targets. Farming is a fixed-asset, long-term business model and, as a result, any changes incur costs relating to the challenges of adopting new methods. The SFI included a number of options that supported farmers migrating their farming practices towards more resilient models. As a result, the gap in support that the pausing of the SFI creates also affects the ability of farms to change cultivation practices to those that are less reliant on inorganic inputs, such as fertilisers and pesticides, or which improve soil health, such as longer rotations. While these all benefit the farmer, they are also a public good in that they support wider policy ambitions for pollinators, the national action plan for pesticides and progress towards net zero, for example.
The considerable benefits to the attainment of the Government’s nature recovery targets and the resilience of farming systems to future climate and economic challenges have been undermined by the suspension of the SFI. It is therefore vital that Defra acts as quickly as possible to provide some stability and visibility of scheme availability, to avoid the cliff edge presented by the ending of the Countryside Stewardship mid-tier scheme at the end of this year.
I end on a positive note. The pausing of the scheme allows for reflection on where things went wrong. It appears that Defra knew that the money was going to run out, but did nothing to mitigate this risk. It may have been deemed a success to get the money out of the door, but not at the expense of the benefits that agri-environment schemes have been proven to bring. There is much to like about the SFI, so an in-depth review is not needed. Instead, consideration should be given to the fairer distribution of money through asking farmers to register their interest and the land area they are interested in committing. A cap could then be applied, if needed. If this then resulted in an underspend, farmers could be invited to add other measures to their existing schemes.
Lord Douglas-Miller (Con)
My Lords, it is a great pleasure to follow my noble friend Lord Shrewsbury. I declare my farming interests as set out in the register.
In a few short months, this Government have achieved something rather remarkable—they have made those of us who farm in Scotland feel lucky. Sadly, they have done this by completely undermining the confidence and financial security of the farming community across England and Wales with a range of poorly thought-out policies. While I concur with the many points that my noble friend Lord Roborough made in his opening remarks, I will focus on three.
First, the reversal of the badger cull will leave many in the dairy and beef sector distraught at the prospect of heightened incidence of TB and the catastrophic impact this will have on many farm businesses. From my own experience, I believe that continuing the badger cull is a key part of the UK’s drive towards eradicating TB. Can the Minister tell us whether the Chief Veterinary Officer was party to and agreed with this decision?
Secondly, the Government’s policy of reducing APR and BPR has been well discussed and the devasting impact on family farms clearly spelled out, so I do not intend to repeat that, save to say that the alleged £500 million that this will bring in represents a rounding error in the scheme of the Chancellor’s self-inflicted economic woes. Is Defra now run as an offshoot of the Treasury or does it have a mind of its own? If it is the latter, could the Minister tell us whether she was party to the decision to reduce these IHT reliefs and whether she agrees with this policy?
Finally, we have the abrupt withdrawal of the SFI, hot on the heels of accelerating the reduction in the remaining delinked payments, creating a perfect financial storm for the farming community and leaving many farmers across the UK nursing heavy losses entirely as a result of the Government’s financial mismanagement. This feels manifestly unjust and must surely be either a deliberate outcome or an unintended consequence of not understanding the implications of their decisions.
I can appreciate that the budgeting process for the various ELMS modules is more complex than the previous CAP system. A demand-led system was always going to be more complex than simply allocating the budget on a per-acre basis. This complexity is not, however, an acceptable excuse for pulling the plug on a critical funding source that underpins the economic stability of the sector. It begs the question of who has budgeting oversight in Defra and why they have they failed at such a basic level.
I know the Minister understands that farmers need clarity on their finances, so I have three questions for her. First, was she involved in the decision summarily to close down the SFI against Defra’s own guidance? Secondly, has she any oversight of the budgeting process within Defra, and if not, why not? Thirdly, does she have any knowledge of when the SFI will reopen? My final point is that if farmers are to have any chance of navigating their way through the post-Brexit transition, they need clarity and certainty. At the moment, they have neither.
One much-discussed remedy is the development of woodland, peatland and biodiversity credits, which should sit squarely within the wider environmental delivery plans. My noble friend Lord Roborough articulated that farmers and landowners need clear guidelines and positive encouragement, rather than the threat of a government arm’s-length body compulsorily purchasing their property if they do not follow Natural England’s mantra. I totally agree with my noble friend Lady Coffey’s assessment that to give CPO powers to Natural England—an organisation that is widely discredited, disliked and distrusted by the farming community—is both disproportionate and overarching. I strongly urge the Minister to look at this again before it causes serious conflict within the farming community.
Lord Carrington (CB)
My Lords, I declare my active farming interests in Buckinghamshire and Lincolnshire. I thank the noble Lord, Lord Roborough, for bringing this debate, and all noble Lords who have contributed so far on the wide number of topics that it involves. I think we can all agree there is vast uncertainty in farming and rural policy due to government action on taxes, SFI and, most importantly, the empty public purse. This is compounded by the forthcoming land use framework, the national food strategy, the 25-year farming road map, the Planning and Infrastructure Bill, the Renters’ Rights Bill and much more.
Despite the uncertainty, farm businesses need to move on, although planning in relation to environmental measures and the horticultural sector must wait until further government announcements on the SFI later this year, as well as any replacement for the fruit and vegetable aid scheme. Productive, profitable farming needs to look at an industry without subsidies but with a level playing field when it comes to trade policy and import of agricultural products using methods and chemicals denied to our own farmers. However, the result of decreasing government support will have substantial fallout in the rural community, which the Government will need to address.
Unsubsidised farming competing internationally will not be able to afford voluntary environmental good work unless it benefits their farming system. Continuing support for the environment and biodiversity will be required, albeit in a more targeted manner. Parallel to this, it is great to see that, in the other place, Alistair Carmichael has introduced the food supply chain fairness Bill, which hopefully will increase margins for our farmers against major retailers.
As far as this debate is concerned, I wish to highlight the importance of growth and productivity in farming to the rural economy and particularly how to facilitate much-needed investment in agricultural science, innovation and technology. The APPG on Science and Technology in Agriculture, of which I am a member, has focused on the need to attract investment to support farm innovation, as the UK is a recognised powerhouse in terms of plant science and agri-research. The big challenge is to convert all these wonderful ideas into accessible, profitable commercial farming, and, for this, investment needs to be attracted from both the public and private sectors. So far, we have not been successful in launching public/private partnerships involving government, industry, science and investors. To bridge the gap between scientific research and commercialisation of these ideas, we need to study how other countries, such as Canada, Brazil and Australia, have successfully used this model of public/private partnerships to achieve this end.
The Oxford-Cambridge arc growth corridor is a welcome move by the Government to encourage growth based on our enviable scientific research. We need a series of innovation hubs with infrastructure and ecosystems which attract and support high-growth start-ups, investors and corporate partners. This works well in the United States and France. To quote a recent article in the Financial Times:
“Frequent convening of entrepreneurs, accelerators and talent is … vital. So is physical co-location of research, capital and industry”.
Our public finances may be weak, but the returns on investment in areas where we lead the world, such as agricultural-related science, far outweigh the costs.
With government encouragement, innovation hubs and a stable investment climate, we will be able to emulate the United States in targeting a 40% increase in food production by 2050, while reducing farming’s environmental footprint by 50%. With all the self-induced financial upsets, can the Minister tell us how the Government plan to bring stability into the agricultural industry, as this is the basic requirement for investment and growth?
Lord Horam (Con)
Unlike the noble Lord, Lord Carrington, I am afraid that I do not possess a great knowledge of farming. However, it is interesting how many noble Lords who do not possess a knowledge of farming have been drawn into this debate; it shows the concern that everybody has for farming and for what is happening as a result of the Government’s actions.
The nearest I got to understanding farming was when I was asked, a long time ago, to consider putting my name forward to become the Conservative candidate in the Monmouth by-election. Realising that Monmouth was a rural area with lots of farming, I rang my wife’s uncle, who was a farmer in England, and we had a useful half-hour discussion. When I got to the final of Monmouth, there were three people there—Evans, Evans and Horam—so clearly I had no chance. But I was mollified when the president of the Welsh NFU came up to me afterwards and said, “Mr Horam, I am sorry you were not selected because you do show a remarkable understanding of the problems of Welsh farming”. Little did he know.
However, I must not totally underestimate my knowledge of farming, because I was brought up in the Ribble Valley, which is very much a farming area. I was born there during the Second World War, when, of course, food security was of immense significance. We had rationing, which meant that there was no obesity as well as no malnutrition—although the downside was that the food was extremely stodgy and, as the official history of the Second World War states, there was a remarkable level of flatulence as a result of the food we were eating then.
As someone with that concern for farming, I was shocked and dismayed by the Budget and its effect on farming. I do not think that the intention was deliberate; I think it was rather accidental, because it was a Budget resolution. As my noble friend Lady Coffey remarked, the people at Defra are, in essence, urban MPs. The same can be said about the Members of Parliament in the Treasury: they are predominantly urban MPs and have little understanding of the effect on farming of taking a short-term budgetary view of what we have to do. This is another example of how taking an immediate fiscal framework, rather than a long-term view, has disastrous consequences. But it is certainly not accidental that the Government have followed that up with the closure of the sustainable farming initiative. Jenni Russell said in an article in the Times:
“It is a shattering betrayal of the farmers who trusted Starmer’s commitment to greener policies … As one prominent farmer and environmentalist … said: ‘In the context of everything farmers and society have been told since 2017, this is insane’”.
Those are strong words from the Times.
Curiously, this damaging approach to farming was not always a characteristic of Labour Governments. The Minister—who, as we know, is a very capable woman and very good at the Dispatch Box—was the former MP for Workington. She will remember one of her illustrious predecessors, the great Fred Peart, who was the Secretary of State for Agriculture, Fisheries and Food, as it was called at that time, not once but twice in the second Wilson Administration. He was much loved by farmers and had great experience and understanding of the farming community.
In addition, another MP during that period, Joan Maynard, was a representative of the agricultural workers. Because she was very left wing, she was called “Stalin’s Granny”—very affectionately—by the House of Commons. She would not have stood for all this nonsense and the effect on agricultural workers. So I appeal to the Minister, for whom we all have a high regard, to take her colleagues on a trip down memory lane, in order for them to realise that Labour once had real wisdom and understanding of community, and to persuade them to change their minds on these disastrous policies.
The Lord Bishop of Hereford
My Lords, I am grateful to the noble Lord, Lord Roborough, for introducing this important debate. I speak as the Bishop of the most rural diocese in the Church of England.
Agriculture provides significant employment and is extremely diverse, from substantial agribusinesses to small family farms, and from large arable enterprises to small livestock hill farms. Prior to ordination, I worked as an agronomist, advising farmers on all aspects of crop production, translating scientific research into the practical solutions commended by the noble Lord, Lord Carrington. I have the privilege this year of being president of the Three Counties Show at Malvern, an event I warmly commend to noble Lords as a splendid day out.
However, over 40 years of involvement in the sector, I can honestly say that I have never seen morale so low nor such disillusionment with the Government’s capacity to understand and respond to the needs of the agricultural industry. A thriving agri-farming industry is essential to the wider health of the rural economy. Family farms are at the heart of this ecology. The inevitable consolidation of units that will ensue from proposed changes in APR and BPR will have huge knock-on effects on support industries, lead to rural depopulation and undermine the viability of many local services and businesses.
The Government have already rejected very reasonable alternative proposals from the NFU for a clawback mechanism, which I need not rehearse here. There are injustices in the existing application of APR and BPR which need to be addressed, as the noble Lord, Lord Davies of Brixton, has already mentioned in this debate.
The NFU proposals, which mirror similar practices in the rest of Europe, would go a significant way to addressing these without collateral damage to small family farms. A conservative modelling shows that such a clawback scheme would still raise an extra £554 million for the Treasury—some 7% more than the return from current proposals. I hope the conversation about agricultural policy can move beyond an arid discussion of numbers and economic modelling. This speaks to questions of honesty and good governance.
This Government campaigned on a manifesto pledge to support farmers and stimulate rural economic growth. I attended an event in this House shortly after the election, at which I am sure I remember the Minister assuring us that no changes to APR and BPR were planned—and yet within weeks, those assurances had been set aside.
Members of the Government in the other place have distanced themselves from government policy on inheritance tax, recognising the serious effects it will have on their farming constituents. Given that the proposed changes to inheritance tax seem to have been driven by the Treasury without consultation with Defra, there would be no shame in thinking again as the implications of this policy for small family farms become evident.
Foremost in my mind are the men and women who provide the food we eat and who work in an industry that is extraordinarily demanding. In all weathers, with a woeful return on capital and working hours that would be unacceptable in almost any other walk of life, they produce the most basic staples of life. Theirs is the mental health and well-being undermined by the proposed taxation policy. They feel ignored, misunderstood and marginalised. I urge the Government to ensure that this community’s voice is heard and responded to.
Baroness McIntosh of Pickering (Con)
I congratulate my noble friend on securing this debate, and I welcome the Minister to her place today. I declare my interests as vice president of the Association of Drainage Authorities and a member of the rural interest group of the Church of England Synod; I also work with dispensing doctors in rural areas. I can testify to the inequality in access to healthcare, housing and transport in rural areas.
It is a matter of regret that Labour, having been elected on the promise of restoring trust and confidence in government, has achieved quite the reverse with its farming and planning proposals. First, it reversed its promise not to amend inheritance tax proposals affecting farms, or agricultural property relief; then there was the early closure of the sustainable farming initiative, with no promised six-week notice. How can any responsible farming business plan around such erratic policy changes without notice or time to prepare to make alternative arrangements?
The impact on the uplands has been severe. Farmers are stuck in less lucrative, higher-level stewardship schemes and are unable to switch. Early SFI closure has had a particularly devastating impact on family and upland farms. There is a long-term threat to livestock, which will simply disappear from the uplands, and there will be a consequential knock-on impact on lowland farms too.
I urge the Minister to find a better balance between food production and nurturing nature, and to recognise: who better to achieve this than farmers, who actively farm the land and tend the livestock?
The issues of food security and greater self-sufficiency in food must be addressed. We must learn from the invasion of and ongoing hostilities in Ukraine the lesson of how quickly the food supply chain can be upturned.
The economic impact of the international aspects of food and farming cannot be ignored. The free trade agreements with Australia and New Zealand have been neither fair to our farmers nor have allowed them to compete. The very minimum demand in any free trade agreement should be that imports be permitted only if these agricultural products meet the same animal welfare and environmental standards as are demanded of our domestic producers. In addition, no meat should be allowed into the UK if produced with antibiotics or hormones or rinsed in chlorine.
Farmers play a crucial role in flood prevention and flood resilience. The noble Baroness will have seen this first hand locally in her time as a constituency MP. This role is exercised through internal drainage boards, as well as the regular maintenance and dredging of water courses, for which farmers and landowners are responsible. It is still not clear whether the temporary storage of water on land, by farmers and other rural businesses such as golf courses, will be rewarded under the ELM scheme. If so, how will the de minimis rules of the Reservoirs Act apply in these circumstances?
The role of auction marts should be celebrated. They not only set an economic and transparent price, but enable the animals to be seen live at the point of sale, and provide an essential social and support network.
Farming is a vital part of the rural economy. When farming does well, a market town flourishes. Children attend schools in a healthy and well-fed fashion, and farmers clear the roads of snow and ice in winter and play other such roles throughout the year, benefiting the rural community—at no cost.
The Planning and Infrastructure Bill poses a further threat to rural communities with its proposals for building and developing on high-grade agricultural land. The Minister kindly promised to return to me on the vexed question of 9% of farmland being lost under energy proposals to build solar farms, battery storage plants and pylons on farmland. Has she had the opportunity to look at this and discuss it with the Energy Minister in this place? Farmers need certainty and stability, not these constant changes at short notice, which do not instil confidence for their future.
Farmers’ mental health is an issue of mounting concern. I pay tribute to the churches for their rural pastoral work, as evidenced by the outreach to rural communities such those in Thirsk.
When did the Government take their decision to end SFI? Will they recognise and reward upland farmers for producing food at a time when food security and self-sufficiency levels are being challenged? Will the noble Baroness address the issues of falling stock levels and tenant farmers, most particularly in the uplands; and what will the future be for graziers who want to graze in perpetuity on common land? Finally, where will the growth of the rural economy come from, if not from farming?
Lord Best (CB)
My Lords, I thank the noble Lord, Lord Roborough, for initiating this timely debate and I am delighted to follow the noble Baroness, Lady McIntosh, who is such a champion for rural communities.
My comments address the impact of the Government’s economic and planning measures on the critical issue of housing in rural areas. I will draw on the work of the Devon Housing Commission, which I was delighted to chair and which reported last year.
The shortage of secure, decent, affordable homes is creating particularly acute difficulties for employers in the private and public sectors in rural communities. But rural areas have half as much social housing—from councils and housing associations—as elsewhere: only 9% of the stock, compared with 17% in the country as a whole.
The 25 to 35 year-olds are moving away from many rural areas, not just because they cannot compete with house purchasers moving from other places, but because private sector rents are beyond the reach of even those on average incomes. Without a workforce, local businesses and public services inevitably decline.
The Government are taking action in respect of some of the recommendations of the Devon Housing Commission, but really need to go further. First, the affordable housing programme needs adequate funding. The Government have found a very welcome extra £800 million, but their agency, Homes England, should recognise the special value of investment in rural areas: 10% of total grant funding should be earmarked for rural housing associations and local community land trusts.
Secondly, in rural areas, as elsewhere, the Government are tackling the delays and blockages caused by inadequate resources for planning departments. The Planning and Infrastructure Bill should speed up and increase delivery, and local government reorganisation should ease the pressures created by having a multiplicity of planning authorities in some rural areas. Devon, for instance, has 10 local authorities with planning responsibilities, which, in future, will be combined into unitary councils to streamline local processes.
Thirdly, there is the need to address the loss of properties available for long-term letting to local people in many rural tourist hotspots, caused by landlords switching to Airbnb-style short-term lets. The Government are committed to a registration scheme, and they have consulted on the creation of a new use class, which would require planning consent before tenancies can be converted to short-term lets. I have tabled an amendment to the Renters’ Rights Bill to move this forward.
Fourthly, as recommended by the Devon Housing Commission, Defra has announced further funding for rural housing enablers, which are hosted by rural community councils. These RHEs play a crucial role in brokering small village schemes with all the relevant parties—housing associations, planners, landowners, the parish council, et cetera. However, Defra’s commitment has been for only 12 months at a time, inhibiting recruitment of these enablers; a five-year programme would be much better.
Fifthly, there is the unique planning tool of rural exception sites, which enable planning consent to be granted for development exceptionally, precisely because the homes will serve local needs. These developments can produce delightful, affordable, sustainable homes for local people, replenishing the local primary school and rejuvenating the local community. It would be good to see the Chancellor encouraging landowners to make sites available for more of these village schemes through tax reforms, as advocated by the Country Land and Business Association.
In conclusion, both the building of new homes that are unaffordable to local households and the flipping of accommodation for rent to short-term lets and second homes risk rural communities becoming enclaves of older, more affluent owners. These trends are stifling economic growth, as well as eroding long-established rural communities. Can the Minister assure the House that the Government will support more of the excellent local social housing schemes, which can do so much to sustain and revitalise local economies and rural communities?
Lord Bellingham (Con)
My Lords, it is a pleasure to follow the noble Lord, Lord Best, who has given us some very interesting ideas about housing. I declare my interests as in the register and congratulate the noble Lord, Lord Roborough, on moving this debate.
We have heard a lot of facts and figures, but in my short contribution, I want to try to get behind the facts and look at some of the human interest in this and some of the real examples. In fact, the noble Lord, Lord Harlech, did the same with his two examples. I was lucky enough to be briefed by my NFU contact, who explained to me exactly what is happening in one particular Norfolk village in the heart of the Norfolk rural community—not my old constituency, and I will not identify it. I want to take your Lordships on a great tour of that village and the farming activities in and around it.
Farm A is a 1,200-acre farm in this village of 400 people which has a thriving school, a church, a pub and a village shop. It is a tenanted farm from a big estate, and it is well run, mainly arable, with some water meadows, two full-time employees and two sons who qualify under the 1948 legislation. The farmer is on the parish council. The wife is involved with the school as a governor and is a PCC.
Farm B is a 600-acre farm that is owned by fourth-generation farmers. They have two daughters. He operates as a contractor to enhance his business. He and his wife are also very involved with the community.
Farm C is an owner-occupied farm of 200 acres which has been in the family for four generations. It is a small farm which has morphed into being more of a hobby farm, as the two brothers involved are also involved in other businesses to make ends meet.
Farm D was bought about 30 years ago by a commercial farming family. It is a very well-run family farm of 1,400 acres, with two full-time employees and three children. The farmer is vice-chairman of the parish council.
My NFU friend and I talked through what might happen under these inheritance tax changes. The farmer at the tenanted farm is really worried. You might think, “He’s not involved, he’s a tenant”, but if the estate involved is hit by 20% IHT, it will have to raise £10 million over 10 years. What will it do? It will probably sell the tenanted farm for solar arrays. As my noble friend Lord Grayling pointed out, in Norfolk a lot of grade 1 agricultural land is going over to solar, which is a disaster. The tenant could be evicted. The house would be sold to a second-home owner. The support for community would be lost.
I have also spoken to the farmer with the 600-acre farm, who is devastated. He has two daughters and no idea what to do. He is over 80. He was going to wait until he died. The farm would then be left and there would be no IHT. What will he do? Will he sell it now? No, probably he will take the hit and the farm will be sold, probably to a large farming company.
Farm C is 200 acres. The Government go on about how this will not affect small farms, yet 200 acres is a tiny farm which will definitely be hit by this. Half the farm will be sold. It will probably be consolidated into a much bigger holding.
Farm D is an interesting case. The farmer is relatively young. He has three children—two sons who do not want to farm and a daughter who might want to farm—and a grandson who wants to go to Cirencester. He does not want to take a decision at the moment about making the farm over because if he does, he will have sibling meltdown. He wants to wait until he dies and then probably make it over to the grandson. If he makes it over now, what will the two sons feel about their inheritance? One is a doctor, the other works in finance.
As the right reverend Prelate the Bishop of Hereford pointed out, we will see a consolidation of holdings and a destruction of local supply chains, as all these farms use local suppliers. We will see communities broken up. Farmers feel very angry. Is it surprising? Just over a year ago, Steve Reed, the shadow Environment Secretary, gave a “cast-iron guarantee” that an incoming Labour Government would not make any changes to IHT relief. Farmers trusted in him. Some voted Labour; they feel totally betrayed. How do the Government expect to deliver the rural agenda of a farming policy without the good will of farmers? They have lost that good will. Farmers feel betrayed. There is still time to make up and repair the damage, but time is running out. I implore Ministers to listen.
Lord Elliott of Mickle Fell (Con)
My Lords, it is a pleasure to follow my noble friend Lord Bellingham. I very much agree with his comments about inheritance tax. I congratulate my noble friend Lord Roborough on introducing this debate and take this opportunity to thank him for the help and advice that he gave me when I came to this place just over a year ago. Having been born and brought up in central Leeds, before moving to central London for university and then living in six London boroughs, I am acutely conscious that many of the other speakers in this debate have much more experience of agriculture and rural affairs than I do, so I will keep my contribution relatively short.
The point I would like to add, which I have yet to hear, is on the importance of a vibrant rural economy in getting people from welfare into work. To take a step back, the Government are rightly committed to getting the employment rate back up to its pre-Covid level of 80%, by getting 2 million people from welfare into work. This was outlined in their Get Britain Working White Paper before Christmas and more recently, a fortnight ago, in their Pathways to Work Green Paper. I very much welcome this objective and commend the Government for their ambition.
The focus of such plans, and often the focus of similar think-tank plans in the welfare-to-work agenda, is often on towns and cities. I note that, as we speak, the Work and Pensions Secretary is in Barnsley to launch the first of nine “Get Britain Working” trailblazer programmes. However, rural communities are often overlooked in this debate. While the problem of worklessness is undoubtedly an issue in urban areas, it is also an issue in rural areas. My noble friend Lady Coffey has already touched on the important issue of rural poverty. The latest data show that rural inland areas have economic inactivity levels of 19.6% and that rural coastal communities have a rate of 21.9%. This compares to 21.5% nationally. Given that rural areas often have fewer job opportunities than their urban counterparts, we must not forget rural communities in the welfare-to-work agenda.
Recent research by the Jobs Foundation—a charity of which I am president, as declared in the register—called Two Million Jobs, looked at the whole welfare-to-work agenda across the country and focused on four areas: a city, Sheffield; a town, Loughborough; a coastal area, Hartlepool; and a rural area, Pembrokeshire. When we looked at Pembrokeshire, we saw the incredibly important role of farms in the area in providing local jobs. We also saw the hospitality and tourism industry in Pembrokeshire and the local oil refinery—Pembroke refinery, run by Valero—which has a fantastic scheme to get people from further education into high-quality jobs. All these businesses are vital to the Pembrokeshire jobs market and will be the employers that ensure that the Government can get the employment rate back up to 80% across the country.
In our national mission to get 2 million people into work, it is therefore essential that the Government’s economic and planning measures are geared towards helping rural businesses to thrive, so that they too can play their part in getting Britain working.
Lord Bilimoria (CB)
My Lords, for over a quarter of a century, as founder of Cobra Beer, I produced beer in the UK with British-grown barley. I am proud of the high quality of our agriculture sector’s produce, leading to Cobra Beer winning 150 gold medals. Agriculture makes up just 0.6% of the UK’s GDP and, for over a decade, I helped and worked with the management of the family farm of my wife’s uncle and aunt, in the Free State in South Africa—thousands of acres comprising dairy, arable, sheep and cattle. I thank the noble Lord, Lord Roborough, for initiating this very important debate.
I ask the Minister about the closure of the sustainable farming incentive scheme—SFI. After Brexit, our farmers no longer had access to the common agricultural policy, which provided financial support to farmers through subsidies. How are farmers now going to be compensated for the loss not only of the CAP but of the SFI? Farming groups are of course worried about the inheritance tax relief reforms, with inheritance tax of 20% now being applied to family farms. The NFU thinks that this threatens family farms and food security, estimating that 70,000 farms could be affected. Surely there is an argument for reversing this harmful policy.
I give the Government credit for some of their initiatives—for example, extending the seasonal worker visa route for five years, investing £110 million in agritech through innovation programmes, establishing the National Biosecurity Centre to combat animal diseases and publishing a 25-year farming road map later this year. But would the Minister agree that we should prioritise farming in the coming spending review and increase the annual agricultural budget to £6 billion?
When it comes to the inheritance tax reforms, they are supposed to affect fewer than 500 estates, according to the Government. But what if a farmer passes away within the next seven years without having had the chance to plan the transition? A survey by Family Business UK has found that over 200,000 jobs in family-run businesses and farms could be lost due to the Government’s decision to cap business and agricultural tax relief. The inheritance tax changes to take effect from next year limit the relief, as I said earlier. Some 55% of family businesses have paused or cancelled investment, nearly a quarter have stalled hiring or cut jobs, the farming sector alone could lose almost 30,000 jobs, and the changes could reduce economic value by £14 billion. Surely, this policy is going to backfire, leading to sales of farms and lower taxation revenue for the Government. Would the Government consider reviewing this policy?
There are alternatives, such as a targeted tax relief for working farmers; a government-underwritten insurance for elderly landowners; exempting the elderly, for example, those over 80, from tax changes; and separating the agricultural property relief from business property relief. The chair of the EFRA Committee, Alistair Carmichael, said:
“Agricultural property relief is not a loophole; it has been a deliberate policy of successive Governments for the past 40 years, designed to avoid the sale and break-up of family farms. … These changes will have a ripple effect across the whole rural community”.—[Official Report, Commons, 4/11/24; col. 24.]
In some cases, farms will simply leave too little income for the inheritor, who will have too few other resources to pay the tax and will be forced to sell part or all of the farm.
To build on what the noble Lord, Lord Kakkar, said about access to medical care in rural areas, I am proud to be the London chair of the ambassadors of the Cambridge Children’s Hospital, which is going to be built in conjunction with the University of Cambridge. Do noble Lords realise that, in the whole of East Anglia—a rural area—there is no children’s hospital? They have to go to Birmingham, where I was chancellor of the University of Birmingham for 10 years, or they come here to Great Ormond Street. We will now have a children’s hospital for this large rural area.
With regard to self-sufficiency and food security, the UK produces 60% of domestic food consumption by economic value. We produce the majority of our grains, meat, dairy and eggs, yet we have to import 40% of our food. With the US tariff wars now destabilising global supply chains, the NFU is concerned, because the US is our second-largest export market, and the largest market for British agri-food products, outside the European Union. Our farmers are proud of the quality of what we supply. Our Secretary of State for Business, Jonathan Reynolds, has said that there is a red line that Britain will not accept hormone-treated beef and chlorine-washed chicken—a major sticking point in previous negotiations.
To conclude, it is so easy to take the farming and agricultural sector for granted. It should always be a top priority for any Government at any time.
Lord Fuller (Con)
My Lords, in just six months Labour has morphed from casual indifference towards the farmers who grow the barley—for our noble friend Lord Bilimoria—and the communities who act as custodians of our landscapes towards outright hostility.
Noble Lords will know from the register that I have farming interests, but I am principally involved in the fertiliser industry, which sits at the start of the food chain and is part of a very large economic ecosystem in the sticks, alongside machinery dealers, dairy engineers, animal feed manufacturers and the more esoteric artisan trades such as ditchers, drainers, fencers and thatchers, to name just a few. The Government’s hostility to these people is felt not just by farmers but in the trading estates that surround every market town in Britain, mostly through these family-owned businesses. We know, and have just heard, that it has taken Defra to tell the Treasury how to count the number of farmers correctly, but neither Defra nor the Treasury has stopped to consider those wider ecosystem businesses, which are the true multipliers of rural prosperity.
Labour’s fundamental misunderstanding of how the real economy works has perversely and disproportionately affected the shires, where 90% of businesses employ 10 people or less, and the business property relief plans discriminate particularly against tenant farmers, the most dynamic and entrepreneurial of farmers, who live by their wits without the cushion of inherited land. As our noble friend Lord Bilimoria, says, business property relief is not a loophole; it is a feature of our economy.
Labour has precipitated a countryside cash-flow crisis by the summary suspension of SFI, with the result that artisan craftsmen have to wait longer to be paid. Astonishingly, the scaling back of ELMS has made nature-friendly farming approaches economically unsustainable. Now only intensification can prevent a small fortune being made by starting with a big one. The effects of VAT and business rates on private schools are hollowing out our rural market towns, where the school is often the largest employer, and the cook, the cleaner and the groundsman—not highly paid people—are being let go.
Alongside this economic illiteracy, I detect something more sinister afoot in the new planning measures, for buried away in the Finance Act we saw provisions whereby agricultural property relief could be available only to environmental schemes operated by the state. In Labour’s world, there can be no room for private sector innovation in the delivery of environmental goods, where Britain has demonstrated substantial comparative advantage. Labour’s solution is to reward the deeply conflicted enemies of growth at Natural England with monopoly operating powers, alongside other powers to confiscate land in pursuance of their activist agenda. Who knew that the socialists wanted the state to own all the factors of production so badly?
I should know because I have had to deal with Natural England as a leader of a council. I exposed it as selectively quoting and misrepresenting academic evidence that it said supported its views but did not. It capriciously chops and changes its mind on a whim. It stands in the way of progress and innovation by mendaciously and spitefully placing every obstacle in the way of councils and others who have been forced to step in to do the work it and the Environment Agency are paid to do but are not doing. It is unaccountable, yet places unaffordable burdens on business, stops the building of affordable homes for rural families and has driven many small builders to the wall. I have read the Corry report, published yesterday, and I regret to say that there could not be a less appropriate body than Natural England to be given this important work or to be awarded trusted status, for by its actions it has forfeited that trust.
My overwhelming fear is that the Government will now be “Nationalising Nature” by becoming the sole regulator, financier, inspector, confiscator and operator of environmental schemes, jacking up charges to support a bloated bureaucracy while acting as judge and jury of what only they deem to be acceptable. I welcome suggestions to realign the overlapping cat’s cradle of regulators that hold back ambition, but we will need more than a rewriting of guidance to remove the dead hand of the state that acts as a drag anchor on progress, innovation and growth in the shires. Only a complete rewiring will do.
Whether it is by its economic, social or environmental policies, Labour may think that it is attacking farmers in a class war, but it is ordinary working people in family firms in the wider rural economy who are caught in the crossfire of its culture clash, the effect of which is to damage the long-term rural economy and the landscapes we should all strive to enhance.
Lord Teverson (LD)
First, I declare my interests as chair of Cornwall and Isles of Scilly Local Nature Partnership and as a director of Wessex Investors, which is involved in the development sector. I thank the noble Lord, Lord Roborough, for this debate. I know he feels very passionately about this area.
I want first to react and respond to the right reverend Prelate the Bishop of St Albans, who is a true champion of rural affairs, particularly as chair of the Rural Coalition, because the rural economy is often forgotten about. It is important. It is not just farming; it is coastal fisheries, all the SME environment and much more. There are big challenges there, as he said. We can take rural transport, which has declined hugely. It is a real challenge for young people to get to education facilities and for ordinary people to get to work. In the financial area, we have had a huge number of banks closing in urban areas within the countryside, leaving huge areas where people who want to talk to their bank manager find it almost impossible.
The noble Lord, Lord Kakkar, mentioned health. I remember when I first became a Member of this House going along to an all-party parliamentary group on health where there was one of the country’s experts on strokes. I said, “I live in rural Cornwall. What should I do about that challenge?” He answered very quickly, “You should move”. That is the dilemma of living in rural areas and the countryside today
On housing, as the noble Lord, Lord Best, pointed out, we have a serious lack of social housing. When we had the right to buy, we were promised that for every social housing unit sold there would be a replacement. That never happened, in practice. I have to say to the right reverend Prelates that in my own parish of St Ewe the church commissioners have put up for sale some land next to social housing that was built in the past by our village. The church has insisted that it goes out to the open market, despite the fact that, as a local community, we have said that we will pay the market price. It is still out there for anybody to buy on a public quoting system. If the right reverend Prelate would like to have a word with the Bishop of St Germans, I would be very grateful.
We have all these challenges in local communities: transport, housing, access to finance and even energy. The noble Lord, Lord Elliott of Ballinamallard, mentioned the issues in Northern Ireland. Of course, in rural communities we are not generally on the gas grid and have to pay much higher oil heating charges, and that is particularly the case in Northern Ireland. I have to say that a lot of those issues got considerably—and seriously—worse during the incumbency of the previous Government.
On farming, those who mentioned the SFI are absolutely right. I find it incredible that a government department somehow appears to be caught out in its budgeting on one of its major policy planks—not just on farming sustainability but on the growth of nature too. We come to a situation where, with no notice, the scheme ends, leaving many people in limbo. As far as I can see, government policy on nature restoration is also in limbo. Farms that have been on countryside schemes that are coming to an end this year—I think some 35,000 farms are coming to the end of Countryside Stewardship programmes—will have nowhere to go once those programmes are finished.
We have had some excellent specific instances from the noble Lords, Lord Bellingham and Lord Harlech. I spoke to a friend of mine who farms in north Cornwall. She made the point that she has been very enthusiastic about a holistic and sustainable approach to her dairy farming, but said, “What I can’t do now is trust that those schemes will be there for the future. Therefore, what do I do about all the work that I have done so far, while trying to keep my farm viable for the future?”
Back in the days of the European Union, the CAP was not good, but we knew pretty well for seven years that there was going to be consistent policy. We felt we were going to have that with the much better environmental land management scheme, yet now we have uncertainty ahead. Farming, including for biodiversity, is something that needs to be planned and consistent—not just over seven years but beyond that—but we have those uncertainties.
I was pleased that the noble Lord, Lord Grayling, talked about biodiversity corridors and everything that needs to be done there. One of the challenges we have now—I have mentioned this to the Minister before—is that Defra needs to move out of being in silos and be much more comprehensive. I will come to the Corry report in just a second, as it might solve that.
What concerns me is that while we have local nature recovery strategies now in England—48 separate ones that are, I hope, co-ordinated to a degree—at the moment we cannot use ELMS to tie up with them, and the planning process does not especially tie up with them. What we need is a much more holistic approach to biodiversity, to get to those wildlife corridors and everything else that we need to get somewhere towards our 30 by 30 targets. We need to make sure it is far better managed and focused than it is at the moment. Many of those schemes are good, but we need to make sure they can be effective.
The Corry report—I think it came out yesterday or the day before—is on Defra having to move forward in a number of ways. I welcome a number of areas of that report which are relevant to this debate. First, there is having one environmental organisation, out of the many in the Defra family, to lead on major planning issues, although I sometimes think that would be quite useful on smaller planning issues as well, particularly in rural communities where those developments are not so large. Another area is making environmental enforcement better and more practical; there are many other areas as well. I am not going to ask the Minister to say which of those 29 recommendations she will or will not follow, but will the Government take them seriously and start to implement them fairly quickly?
Lastly, I come on to trade, mentioned by the noble Baroness, Lady McIntosh, and others. Trade policy is very much in focus at the moment, and I have a concern. We have seen the very bad reaction that the farming community had to the Australia and New Zealand deals under the previous Administration. I understand that the Government are focused on future economic and trade relations with the United States. I get that, but what I would really like to hear from the Minister is that, rather than the fight between the trade department and Defra that we had under the previous Administration, we have a determination that we will not import food from the United States that is substandard in comparison with our own standards.
My only other question is: when will the SFI function again and can we have confidence that it will be a continuous programme, rather than stopping and starting?
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)
My Lords, I congratulate the noble Lord, Lord Roborough, on securing this debate and all noble Lords who have taken part. The debate has covered a wide range of topics and there has been a large number of questions. I will do my best to answer them, but clearly I may well have to write to noble Lords on some areas.
I start by confirming that the Government are committed to improving the quality of life for people right across the country, including those who live and work in rural areas. To achieve this, we must ensure that the needs of people and businesses in our rural areas are at the very heart of our policy-making. We have recently announced our farming new deal. This will support growth in the farming sector and rural communities, and is determined to return farm businesses to profitability.
One of the underlying problems for farmers and the wider rural community is simply that farmers do not make enough money for the hard work and commitment they put in. One of our commitments is to make farming more profitable. That approach is underpinning our 25-year farming road map and our food strategy, through which we will work in partnership with farmers to make farming and food production sustainable and profitable. We have already begun holding farming road map workshops with key stakeholders from across the farming sector, and we plan to publish the road map this summer.
Our support in this for farmers rests on three principles. I thank my noble friend Lord Davies for his support for the farming initiatives we are undertaking. The first principle is our commitment to the sector that has food production at its core. The role of farming will always be to produce the food that feeds our nation. The instability we have seen, both relating to Ukraine and during Covid, shows that food security truly is national security, and we need to move forward in this area.
The noble Baroness, Lady Shephard, particularly mentioned food security and is absolutely right. We need to act to support food production. We are using our own purchasing power as a Government to back British produce, and we have also announced a five-year extension to the seasonal worker route.
A number of noble Lords mentioned trade and new trade agreements. I absolutely understand farmers’ concerns in this area. Supporting farmers in new trade agreements is a priority. We have been clear that we will protect farmers from being undercut by low welfare and low standards in trade deals. We will continue to maintain our existing high standards for animal health and food hygiene. The Government are also committed to developing a trade strategy that will support economic growth and promote the highest standards of food production. On tariffs, I am afraid that at this time I am unable to say anything further than the Business and Trade Secretary’s Statement this morning in the Commons.
Our second principle is that this is a sector in which farm businesses must become more resilient and more able to withstand the shocks that disrupt farming from time to time. That could be severe flooding, drought or disease. We want to help farmers who want to diversify their income to put more money into their businesses in order to survive those more difficult times when they come.
We will give farmers the power to diversify their businesses by speeding up the planning system. In the spring we will consult on how we transform the planning system to ensure that farmers and growers, or their landlords, can build and repurpose buildings on their farms to support their businesses. We will ensure that permitted development rights are working for farmers so that they can speedily convert larger barns into a farm shop, for example, or have the option to set up holiday lets. These changes address long-standing concerns that current planning rules hinder farm businesses from becoming more productive and environmentally friendly.
The third principle is nature. Noble Lords have spoken about this, particularly the noble Lord, Lord Teverson. Restoring nature is vital for food production. We do not believe it is in competition with it. Healthy soils, abundant pollinators and clean water are the foundations that farm businesses rely on to produce high crop yields that actually turn a profit. Without nature thriving, there can be no long-term food security. That is why last year we were pleased to announce £5 billion for the farming budget over 2024-25 and 2025-26. We now have more than half of farmers in environmental schemes supported by this budget.
However, several noble Lords raised concerns about the recent closure of SFI to new applications and the implications of that decision on farmers, nature and the wider rural community. The Government have allocated SFI a budget of £1.05 billion for 2024-25 and 2025-26. That is money that will go into farmers’ pockets and the wider rural community. I know that people have been concerned about the sudden closure of the scheme, but we want to continue to support farmers to transition to more sustainable farming models through a range of schemes and grants. We will announce details of the revised SFI scheme after the spending review.
The noble Earl, Lord Shrewsbury, and the noble Baroness, Lady Shephard, asked further about SFI reform. The noble Baroness asked whether this was a permanent cancellation—absolutely not. We are looking to reform the SFI offer before reopening it following the SR decision. The idea is to introduce more sophisticated budget controls to manage the scheme and ensure that it targets public funds fairly and effectively, as well as where it is most needed—where it will make the biggest difference to nature. We know that uplands need further support, for example.
Several noble Lords raised concerns about the effects of the changes to agricultural property relief on inheritance tax in the context of farming and rural communities. We have debated this at length in the past, so I will now look particularly at the mental health concerns that have been raised. We are aware of the effects of the challenges that the issues of SFI and APR have posed to farmers and others in rural communities. We will continue to provide funding for several organisations that are delivering projects to improve farmer mental health. The Government are giving mental health the same attention and focus as physical health through measures such as employing thousands of new mental health support workers.
On that basis, the noble Lord, Lord Roborough, specifically asked about mental health support in the farming and agricultural community. We have set up a dedicated team to address the particular issues that drive poor mental health outcomes in the farming and agricultural sector. We are working with communities, farming support organisations and experts to look at exactly how we can deliver the best in this area. The Rural Payments Agency also runs a farmer welfare forum.
The Government are aware of the specific challenges and opportunities that make rural and farming communities and economies distinctive. The right reverend Prelate the Bishop of St Albans particularly asked about the economy, as did the noble Lord, Lord Elliott of Ballinamallard. We recognise that rural areas have significant potential for growth and are central to the economy. We recognise that, in order to develop the full potential of rural businesses, we also need to focus on small businesses, which are an important part of our high streets and of the rural economy, with many more people self-employed or working in small businesses. The Government are actively working on that.
The Government have made a commitment that all policy decision-making should be rural-proofed. Obviously, Defra leads on rural-proofing, but individual departments are responsible for ensuring that their policy decision-making is rural-proofed, and we work with them to consider that. We know that a prosperous rural economy requires effective rural transport, decent digital infrastructure, the availability of affordable housing and energy, and access to a healthy and skilled workforce. We are doing our best to work cross-government to tackle these issues.
Rural housing was also discussed, particularly by the noble Baroness, Lady Coffey. We are reforming our planning policy to ensure that we can build the homes that our rural communities desperately need, but at the same time we recognise that we need to protect our green spaces and the natural environment. The Government’s response to last year’s consultation on the National Planning Policy Framework reflected on the higher costs of housing delivery in rural areas and the fact that we want to see more affordable housing as part of our ambition to deliver the biggest increase in social and affordable housing in a generation.
The noble Lord, Lord Best, talked about the work of the Devon Housing Commission and how other evidence on rural housing will be included. The draft housing strategy will be published very soon, so that will be taken into account there. He mentioned the rural housing exception sites. The Government are very supportive of and will encourage work on them. On empty homes, local authorities have the power to tackle empty properties—for example, with an empty homes order. Obviously, we are now working on the Planning and Infrastructure Bill as our next step in the reform programme.
The noble Baroness, Lady McIntosh, raised concerns about the planning Bill’s impact on grade 3 or grade 4 agricultural land, and the loss of farmland to energy projects. The NPPF prioritises using lower-quality land and protecting the best farmland for food production. Large renewable energy projects must ensure that any benefits outweigh any negative impacts on prime agricultural land.
The noble Lord, Lord Grayling, asked about solar energy as well. The figure that I have is that less than 1% of UK agricultural land would be used, even in the most ambitious scenario. I am sure that noble Lords are aware, also, that solar farms can operate alongside farming activities—for example, continued livestock grazing. I shall have to get back to the noble Baroness, Lady McIntosh, about further renewable percentages, as I do not have that figure at the moment.
Noble Lords raised the nature restoration fund and how it will be delivered. We are working closely with Natural England and others to ensure that the appropriate resources are in place to administer it, and it will run on a cost recovery basis. We will recover costs through developer payments, which should unlock development more quickly and provide greater assurance of nature restoration.
The noble Baroness, Lady Coffey, and others talked about Natural England’s role. We would not expect land acquisition to be the first delivery model considered, although clearly it is a possible approach and may well be appropriate in some circumstances. It is important to remember that compulsory purchase is only one tool, and we would expect Natural England to consider using such powers only when attempts to acquire land by agreement has failed, and there is a very compelling case in the public interest.
The noble Lords, Lord Fuller and Lord Teverson, mentioned the Corry review. I urge noble Lords to read it—it came out the day before yesterday. We have begun work on fast-tracking nine out of the 29 recommendations. One is particularly pertinent to the farming sector about rapidly reviewing and reworking regulatory guidance. Farmers currently have to consider and comply with more than 150 pieces of regulation, which we think is unfeasible, so we are looking at that as part of it.
The noble Lord, Lord Roborough, asked about the land use framework. We are consulting on that until 25 April. The idea is that it is not going to tell anybody how to use their land or what to do with it; it is not the intention to use it to make binding decision-making for land or prescribe specific outcomes. It is intended to advise those managing the land and who are preparing local strategies or plans. Clearly, there will be more information on that once it is published.
On health, which was mentioned by the noble Lords, Lord Kakkar, Lord Elliott and Lord Harlech, demographics show that, as they age, people move out of towns and cities to coastal and rural areas, so they are putting the most pressures on the health services at the time when they are going to need most care. The integrated care systems in England should have a specific role to play on that—but I completely understand where noble Lords are coming from, as I live in a very rural area myself. Travel times in Cumbria to healthcare are long and we have poor roads, so it can take an awfully long time. One reason why I am very pleased to be on the Child Poverty Taskforce is because those kinds of aspects of poverty and access to health are a fundamental part of the discussions that we are having.
A number of noble Lords, including the noble Lord, Lord Elliott, and the right reverend Prelate the Bishop of St Albans, mentioned the bus services Bill, which will deliver new powers to local leaders to empower them to choose the model that works best in their area. Clearly, that will include rural services, because buses are vital, and they have been disappearing at far too great a rate in rural areas.
The noble Lord, Lord Roborough, mentioned delinked payments. I declare an interest, because I am in receipt of delinked payments, so I have a very clear understanding of how rapidly they have been going downwards. But we have provided a calculator so that farmers can see the impact that the reductions could have on their 2025 payments.
The noble Lord, Lord Roborough, asked a whether the budget for Weybridge was part of the farming budget. I can confirm that it is separate. The noble Lord, Lord Horam, asked about private investment in tech and innovation. Since 2021, the farming innovation programme has attracted over £54 million in private investment in addition to the £152 million that Defra has committed; it is an important part of what we do.
Tenant farmers were mentioned by the noble Lord, Lord Fuller, and others, and the noble Lord had some very interesting other ideas and thoughts. Defra is working collaboratively with industry representatives to address the challenges faced by tenant farmers, through the Farm Tenancy Forum. The lack of affordable local housing for tenant farmers who want to retire from a tenanted holding has been identified as a key barrier; again, we are looking at that. We have started the recruitment campaign for the commissioner for the tenant farming sector, and that is now live.
The noble Lord, Lord Carrington, asked about research and innovation. As I said, a lot is available if farmers know where to look. We need to figure out how we work with people to make sure that such things are accessible.
The noble Lord, Lord Douglas-Miller, mentioned bovine TB. The Government started work on their new bovine TB eradication strategy to drive down TB rates and end the badger cull by the end of this Parliament. A key part of the strategy is to drive forward the ongoing development of the cattle vaccine. We are working closely with farmers, vets, scientists and conservationists to rapidly strengthen and deploy a range of disease control measures. We are also going to introduce the first badger population survey in over a decade, so that we can have a data-driven approach to inform how and where TB vaccines and other eradication methods are employed. We will also establish a new badger vaccinator field force.
The noble Baroness, Lady McIntosh, asked whether we are helping farmers to support water on farmland. We have committed to a record £2.65 billion floods investment programme, which will deliver on natural flood management; the impact of a project on agricultural land will be included as part of the funding calculator. In addition, we have published a rapid evidence assessment, conducted back in 2024, of flooding and coastal erosion on agricultural land and businesses. That also discusses the evidence for agriculture as a provider of natural flood management.
I am about to run out of time. In conclusion, I have genuinely listened very carefully to noble Lords’ concerns, because I appreciate that there is a lot of concern about funding and support for farming at the moment. It is important to recognise the huge interest and knowledge that this House brings to these discussions. We have had several rural debates in the Chamber and, of course, in the other place. I have also heard separately from many Members who are concerned about the issues faced by the rural areas they live in or have previously represented. I will take those concerns back to the department. The Farming Minister, Daniel Zeichner, is also very cognisant of all this.
I have run out of time, so I wish the House a very restful break and a happy Easter—
Lord Bilimoria (CB)
Before the Minister sits down, I asked several questions and raised many points—not one has been answered. I would be grateful if she put a Written Answer in the Library.
Baroness Hayman of Ullock (Lab)
I did say, right at the beginning, that I would not be able to get to everything within the time and that I would write concerning questions that had not been answered.
Lord Roborough (Con)
My Lords, I am grateful to all noble Lords who have spoken in support of this Motion, and to the Minister for attempting to answer as many questions as she could in the time available. I look forward to her later answers to those that were missed.
I will summarise and highlight a few points. The noble Lord, Lord Davies of Brixton, made a very welcome contribution to the debate, but I take issue with his comments about inheritance tax on family farms and family businesses. Family businesses are the lifeblood of our economy. Without them, we would not have Pearson, Rolls-Royce, GKN, Tesco, Marks & Spencer, Whitbread, Sainsbury et cetera. Large businesses start as small businesses, and they are started by individuals and families. At the moment, we have companies like Dyson and JCB, which are private companies and are thriving.
We on these Benches want fair treatment for all family businesses and to allow them the chance to compete effectively with public and overseas companies so that they can grow into future champions of our economy. Having to be prepared at all times to pay a 20% IHT charge, as well as funding the dividend tax liability on that, is highly damaging. I would go further than my noble friend Lady Shephard and others—all family businesses, including farms, need these reliefs to thrive.
My noble friend Lord Grayling made a powerful case that it is absurd, when we have so much land that is not the best and most versatile, that the Secretary of State for Energy continues to permit so much solar development, in particular on this best and most versatile land. I also completely agree with him that housing development should be prioritised on brownfield land before greenfield is taken.
A number of noble Lords spoke about the disparity in opportunity, healthcare, et cetera, between the rural and urban environments. I particularly noted the powerful discussion of the noble Lord, Lord Kakkar, of access to emergency and chronic healthcare, and the right reverend Prelate the Bishop of St Albans highlighting the productivity gap between the rural and urban environments. The noble Lord, Lord Elliott of Ballinamallard, highlighted the planning constraints on livestock farms in Northern Ireland that make it so difficult to improve animal welfare and allow for better management of animal waste. It was encouraging that the Minister mentioned ongoing work to allow farmers to do more on the planning front to support their businesses. I hope the Government will consult widely on that.
The right reverend Prelate the Bishop of Hereford summed up the mood in the countryside. There is an all-time low in morale, which means there is a huge opportunity for this Government to improve things. I hope that some of the suggestions raised in today’s debate will be taken forward. In the meantime, I beg to move.
Landmines and Cluster Munitions
(1 day, 5 hours ago)
Lords ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
Lord Verdirame
To ask His Majesty’s Government what assessment they have made of the announcement by NATO allies, including Baltic states and Poland, that they intend to withdraw from the Ottawa Treaty on anti-personnel landmines and the Convention on Cluster Munitions.
Lord Verdirame (Non-Afl)
My Lords, I thank everyone who will be speaking today. No doubt we will hear a range of views. I am sure all of us would rather this debate had been prompted by new ratifications of these treaties, rather than withdrawals, and by a more reassuring security situation in Europe. But I trust we can all agree that it is not a lack of commitment to international law or to arms control that has led Poland, Finland and the Baltic states to announce their withdrawal from the Ottawa treaty and Lithuania to withdraw from the Oslo Convention on Cluster Munitions. These are free, law-abiding, peace-loving nations led by mainstream political parties: centrist parties affiliated with the European People’s Party in Poland, Finland and Latvia, social democrats in Lithuania and the liberals in Estonia.
I co-authored the recent report by Policy Exchange on these developments. I thank the noble Lord, Lord Godson, for his intellectual leadership and Air Marshal Ed Stringer, a senior fellow at Policy Exchange, for his invaluable expertise on defence matters. There is a question mark in the title of that report because I do not yet have firm answers to the questions we posed, but these questions are urgent and we need to hear what our Government’s thinking is.
On that note, in an Answer to a Written Question on this topic on Tuesday, the noble Lord, Lord Coaker, said the UK will continue
“to engage bilaterally on the actions States plan to take”.
Can the Minister tell us a bit more about the engagement that the Government have had so far with our five allies, following their announcement? Can she also tell us whether there has been any engagement with the French Government on this matter?
While our focus today is on the Ottawa treaty and the Oslo Convention on Cluster Munitions, we must remember that other important treaties and arrangements for our security are in crisis. The 1990 Treaty on Conventional Armed Forces in Europe was suspended by Russia in 2007. In November 2023, Russia withdrew. Russia has also withdrawn from the open skies treaty. Russia has stopped all verification visits under the 2011 Vienna Document, a very important confidence and security-building instrument.
On the non-conventional front, the picture is also very concerning. Since 2018, NATO has declared Russia in breach of the 1987 Intermediate-Range Nuclear Forces Treaty. The US withdrew in 2019, citing Russia’s continued non-compliance as a reason. In 2023, Russia rescinded its ratification—as it put it—of the Comprehensive Nuclear Test-Ban Treaty.
Russia was never a party to the Ottawa treaty, although it was, and still is, a party to a pre-Ottawa treaty that regulates, but does not ban, the use of landmines. Everyone else in Europe, including Belarus, joined the Ottawa treaty. The Americans did not. The main reason they gave was the defence of South Korea, which has a land boundary of 240 kilometres with North Korea. South Korea has a very advanced military with an active personnel of 500,000 and the second-largest reserve army in the world at more than 3 million. There is a long-standing and significant American military presence in South Korea. Each of the five countries that announced its withdrawal from the Ottawa treaty has a longer land boundary with Russia and Belarus than South Korea has with North Korea. Their armed forces are considerably smaller than South Korea’s, and the Joint Expeditionary Force, which we lead, is also smaller than the US forces in the Korean peninsula. In that sense, it is not surprising that these European allies, in the much more challenging position they face, with Russia on the other side, have concluded that they too may need anti-personnel landmines for their defence.
At this point, the only NATO country sharing a border with Russia that has said it will not withdraw from Ottawa is Norway. Given where that boundary is—some 250 miles north of the Arctic Circle—Norway is simply not as vulnerable to a land invasion from Russia as the other five states.
Where do these developments leave Britain as a state party to the Ottawa treaty, committed, as we are, to the defence of our allies? The obligations under Article 1 are very far reaching. We cannot use anti-personnel landmines, retain them or transfer them directly or indirectly to anyone. Nor can we assist or encourage, in any way, anyone to use them. Section 2 of the Landmines Act 1998 creates various domestic law offences based on these provisions. If anti-personnel landmines become, for better or worse, an important part of the defensive strategy of front-line NATO states, do the Government believe that we can be as effective in defending them while we remain subject to these far-reaching obligations? Have we asked these allies what they think?
To justify our co-operation with them, we would have to rely on a declaration we made on ratification of the Ottawa treaty in 1998. This declaration says that the UK’s understanding is that
“mere participation in the planning or execution of operations”
with non-state parties that use anti-personnel landmines is not a form of assistance prohibited under the treaty. But we are more than mere participants; we are the lead nation of the Joint Expeditionary Force, and therefore the NATO country that would have to lead in the defence of Estonia. Do the Government consider that this unilateral declaration remains fit for purpose in the current situation, and that it would survive legal challenge?
The Cluster Munitions Convention was concluded 10 years after the Ottawa treaty. By then, Russia’s neighbours were becoming nervous. Poland, Finland, Latvia, Estonia, Romania, Ukraine, Turkey and, of course, the United States all stayed out. The one country that went in is Lithuania, but it has now withdrawn. Unlike the Ottawa treaty, the Cluster Munitions Convention does have a provision, Article 21(3), that expressly permits state parties to
“engage in military … operations with States not party to this Convention that might engage in activities prohibited to a State Party”.
The then Defence Secretary, the noble Lord, Lord Browne of Ladyton, who I know intended to speak today, would have reminded us that this was a key provision from a UK perspective, because it meant we could still operate with the Americans and rely on them, but is it sufficient now?
The Prime Minister, who must be congratulated on his leadership throughout this crisis, has said that the Europeans must now be ready to do the “heavy lifting”. He said, rightly, that ours is
“an era where peace … depends upon strength and deterrence”.—[Official Report, Commons, 3/3/25; col. 25.]
If that is so, can Europe’s two main military powers—the UK and France—really afford to deprive themselves of this capability? Let us not forget that both the Ottawa treaty and the Oslo convention provide that if the withdrawing state is engaged in an armed conflict, the withdrawal will take effect only after the end of the armed conflict. Ukraine, for example, remains bound by the Ottawa treaty until the end of its conflict with Russia, even though Russia is not a party. So this rule applies even if one party is the victim of unprovoked aggression by a non-party.
We must therefore consider now the impact on our potential deployment in Ukraine. The purpose of such deployment would be to deter—or to dissuade, as President Macron put it—further Russian aggression. Cluster munitions and anti-personnel landmines have been used widely by both parties in the Ukrainian-Russian conflict. I have read no analysis that suggests that you could be an effective belligerent in that theatre without these capabilities. Indeed, one of the last decisions of the Biden Administration was to supply Ukraine with anti-personnel landmines because, as the then US Defense Secretary Lloyd Austin put it, Russia had changed its tactics and so Ukraine needed them.
Would it be wise to deploy British troops without equipping them with the capabilities that—according to the Americans, the Ukrainians and other front-line NATO allies—are necessary in that very theatre? If we did, would such a deployment have the credibility that effective deterrence requires? In a widely reported speech last month, Prime Minister Tusk said that Poland must achieve “the most modern capabilities”, even in
“nuclear weapons and modern non-conventional weapons”.
That is an alarming statement, and we must consider how best to respond to the concerns that prompted it. Is this not the time to provide Poland and other allies with maximum reassurance on the conventional front to lower any incentive they might have to explore the acquisition of non-conventional weapons? How can we reassure them effectively if we are not prepared to consider reacquiring conventional capabilities that under previous assumptions we thought we could dispense with but that have turned out to be necessary?
We cannot avoid conventional rearmament in Europe, but we cannot afford—and may still have time to prevent—non-conventional proliferation. If we are too cautious on the conventional weapons front, we might miss an opportunity to defuse a far more terrifying arms race. As the Prime Minister said, we face tough decisions—and this might be one of them.
Lord Dubs (Lab)
My Lords, I take a different view from that of the noble Lord. For a long time I have been involved in campaigns against anti-personnel landmines and cluster munitions. Indeed, I have visited the clearing teams in south Lebanon dealing with cluster bombs, and I have met the MAG people in Vietnam who were clearing unexploded ordnance all over the country.
Sixty countries are contaminated. For example, 2 million landmines have been put in Ukraine since February 2022. The problem is that both cluster bombs and landmines are there long after the conflict is over. Cluster bombs do not always explode on impact, and the landmines are hidden away, causing enormous danger to civilians who want to go there long after the conflict: children playing and women collecting water or planting crops. We are leaving countries badly contaminated. The military uses are questionable. I remember an American marine general saying that he would not send his marines where there had been cluster bombs, because if they were to march forward, they would get injured by them.
I attended the Dublin meeting, at which the UK’s influence was maximal. Gordon Brown sent a message saying, “We should sign” on cluster bombs. Other countries said, “If the UK supports this, it must be okay”. We have led the world and set a good example.
Refugees cannot go home safely because their land and fields are contaminated. In Afghanistan, there are 2,200 staff clearing mines and other ordnance. About half of them have been removed already.
I very much regret that Poland and the Baltic states have taken the view they have. The UK should set an example through continuing to fund the clearance of landmines. I feel very emotional about this. I hope the Minister will respond positively.
Earl Attlee (Con)
My Lords, it is an honour to follow the noble Lord, Lord Dubs. We have debated this issue before—18 years ago. I have to say that, in the 25 years I have known the noble Lord, he does not seem to have aged at all. He is still just as effective.
According to your Lordships’ Library, there are only two people in this Parliament who have both operational overseas military experience and operational overseas aid experience—the other one is Alex Ballinger MP.
In 2006, I was the only Back Bencher who counselled caution about the noble Lord’s Bill, and my counsel on the issue has not changed. Some may think that the military advice from myself—and, more importantly, from the noble and gallant Lord who will speak shortly—takes no account of the suffering caused by these munitions and is heartless. Nothing could be further from the truth.
In 1995, I was running an NGO in Rwanda. Every time I passed a hospital in Kigali, I saw young Rwandan soldiers with either one or both lower limbs missing. The blood was often still seeping through their bandages. These images are still with me now, just as strongly as the fatalities and other life-threatening emergencies I have had to deal with. Obviously, these soldiers were victims of landmines.
However, my counsel is to support the Policy Exchange paper and listen very carefully to the noble and gallant Lord.
Finally, the Minister will have to make even more really difficult decisions—and quite soon, because of the six-month rule.
Baroness Brinton (LD)
My Lords, it is a pleasure following both noble Lords, Lord Attlee and Lord Dubs.
At our safe distance away from the front line of facing Putin’s Russia, it is harder for us to understand the threat that the Baltic states, Poland, Finland and other countries face.
Many people think that landmines are a tool of wars past, but Russia’s war on Ukraine is an old-style war, with trenches in the grinding front line. Drones and other modern techniques have added to—not taken away—the threat of unexploded ordnance. Ukraine now has the largest amount of unexploded ordnance in the world.
During the debate on International Women’s Day, I spoke of the all-women landmine teams in Ukraine and other countries who are trained and supported by UK-based HALO and MAG and funded by international aid from a number of countries, including the UK. At a time when other European countries talk of leaving the Ottawa agreement because of threats of invasion on their doorsteps, it is vital that this aid continues.
Tomorrow is Anti-Landmine Day. Today, in the APPG, we heard of a de-mining programme that also helps local people develop and enrich the cleared soil and start growing things again: wheat, vines and olives, whatever the local needs are.
The FCDO has a proud history of supporting landmine and cluster bomb clearance. Regardless of the decisions by the countries facing Russia and the many other countries still living with landmines, can the Minister assure your Lordships’ House that de-mining projects will remain a priority?
This is so much more: local people are trained in a range of skills. As mines are cleared, the trained staff also work with their communities, who are still often fearful and living with the day-to-day consequences of war. They too are given the tools—the cleared earth—to rebuild their lives, create food and recreate their local economy. These FCDO grants work miracles—but, above all, these grants save lives.
Lord Stirrup (CB)
My Lords, in the brief time allotted, I want to make simply one point and pose two questions.
My point is that the law of armed conflict does not prohibit the killing of civilians. It says they must not be targeted, that they must be protected as far as is feasible, and that the risk posed to civilians by military operations must be proportionate to the military advantage sought. That point is crucial.
I come to my first question. During the Second World War, anywhere between 600,000 and 1 million civilians died in the siege of Leningrad, nearly all from starvation. If that siege could have been prevented or even truncated by the use of antipersonnel landmines and/or cluster weapons, would their use have been justified, or should the appalling death toll have been allowed to continue?
My second question is: if we were faced on our border with an aggressive, unprincipled and ruthless foe determined upon destruction and subjugation, and the use of mines and/or cluster weapons would be pivotal in deterring or defending against such a foe, would we be right to use them or should we allow our infrastructure to be destroyed, our civilians to be killed and our children to be kidnapped? Perhaps certitude is easier and more comfortable the further removed one is from the direct threat.
In thinking about the safety of civilians in war, it is crucial to weigh all the factors and to search for a balanced judgment in line with the law of armed conflict. Absolute prohibitions do not lend themselves to such weighing and judging, especially when they are applied only to the defendant.
Finally, the best way to ensure the safety of civilians is to deter aggressors from attacking in the first place. The more risk we take with deterrence, the more we risk civilian as well as military lives.
The Lord Bishop of Southwark
My Lords, I am grateful to the noble Lord, Lord Verdirame, for setting out this important matter so clearly and to other noble Lords for their very evident expertise in this area.
The attempt to regulate behaviour in times of conflict is a very old one. In classical antiquity, war without good cause risked religious pollution and divine disfavour. Your Lordships may think this did little to inhibit it. The Church’s later attempts to restrain violence in Europe developed at the most serious level into the just war theory, with its assigning of the monopoly of force to the state, a restricted list of circumstances where it might apply, and ideas of proportionality and protection of non-combatants.
At its root was the idea that violence is evil, but that, when faced with violence, force may be used, although with restraint. Men and women trained for war and arms deployed for their use have the most fearful capacity. Hence, in ancient doctrine and in modern treaties, we must place limits. I appreciate that the position of the countries named is greatly more exposed to threat than that of the United Kingdom currently, but the virtue and the impact of restraint and regulation are not felt when they are not needed. They are experienced when the pressure is upon us to take fearful measures, yet we persist in upholding the norms we have pledged to observe. That is the intent of these treaties, such as that on antipersonnel landmines and cluster munitions. They have much to commend them.
Lord Godson (Con)
My Lords, I too commend the noble Lord, Lord Verdirame, for bringing this debate and for his own prescience in the matter, notably last year in the debate here on the SDR, when he foresaw that the embattled democracies of eastern Europe might have to withdraw from the landmines treaty and cluster munitions convention.
I also commend my noble friend Lord Attlee, who will be much missed in this place, for his prescience on the matter. But there is also a particular piquancy in his intervention today, because it is 90 years since the election of his grandfather, Clement Attlee, as leader of the Labour Party. That is of direct relevance to our deliberations today, because of course “Citizen Clem” displaced the ageing pacifist George Lansbury. We all remember Ernest Bevin as leader of the TGWU and his famous remark about Lansbury hawking his conscience. It is a source of great pleasure to me that the Labour Party is now the party of Attlee and Bevin when it comes to nuclear weapons and the broader defence of our kingdom.
Unfortunately, the ghost of Lansbury is still present in too many of Labour’s deliberations when it comes to landmines and cluster munitions, and I very much hope that that will change. I was sorry that last year the Minister, in response to the noble Baroness, Lady Bennett of Manor Castle, was slightly hawking her conscience as well in reproaching the Lithuanian Government for their wish to withdraw from the convention. I was sorry about that, but I welcome that in recent days—because I know that this is a work in progress—the noble Lord, Lord Coaker, responded to the noble Lord, Lord Spellar, in a Written Parliamentary Answer that the Government were indeed going to acknowledge the sovereign right of sovereign Governments to come to their own decisions, and I hope that that progress will indeed be maintained.
I have two particular questions for the Minister.
Lord Godson (Con)
Just very quickly—I will narrow it down to one, if the noble Baroness will bear with me.
Baroness Wheeler (Lab)
No. Will the noble Lord wind up, please? The limit is two minutes to allow all speakers to get in.
Lord Godson (Con)
I thank the noble Baroness. There is a carve-out in the cluster munitions convention. Will the Minister give a statement to this House on the legal viability and durability of that carve-out in the cluster munitions convention for our forces—
Baroness Wheeler (Lab)
Will the noble Lord please sit down and wind up? I thank him.
Lord Moore of Etchingham (Non-Afl)
My Lords, I should declare an interest as a senior fellow of Policy Exchange, which has produced very interesting material on all this; of course, the noble Lord, Lord Godson, is its director.
Thirty years ago, Diana, Princess of Wales, campaigned against landmines. I witnessed this because I was editing the Daily Telegraph and I sent our revered former editor Bill Deedes—Lord Deedes—to travel with her to Angola and, weeks before her tragic death, to Bosnia. He wrote beautifully about it, conveying to the world her passionate concern, which he, a holder of the Military Cross, shared. What made the Princess’s Halo Trust campaign possible were the propitious circumstances of the time. Peace seemed to have broken out, hence the Ottawa treaty of 1997.
However, that shared peace has gone and, sad to say, there is no prospect of its return. Our allies which have now withdrawn or given notice of withdrawal from Ottawa or Oslo are not heartless regimes. On the contrary, they directly confront the threat of a heartless regime, and Russia uses anti-personnel landmines, in particular, as a weapon of invasion, because it sows them in occupied Ukrainian territory and prevents reconquest, makes civilian life impossible and channels Ukrainian forces towards their death.
These allies are the countries which best understand the Russian threat, and they know they must be ready to respond in kind. I am disappointed that our Government seem to disapprove, or even to hesitate to withdraw themselves from Ottawa and Oslo. The Prime Minister rightly wants Britain to lead Europe in helping Ukraine against Russian aggression, but it is not really leadership if it primly tut, tuts when our smaller allies toughen up.
I was recently in Kyiv, and I went to see a factory there which was making robots. The robot carried two things: it carried Ukrainian landmines to plant, which would pass over minefields, and it carried a kamikaze landmine, which would blow up at the end of its mission. Surely those were necessary things to do, not things that should be prevented by adherence to a convention.
Lord Robathan (Con)
My Lords, I will speak very briefly, because I have time only for that, and I speak as who somebody has been in a minefield. Indeed, in Iraq, the wheel of the Land Rover behind me was blown off by an anti-personnel mine, and believe me, if you have just seen an anti-personnel mine go off, you do not want to get out of that Land Rover, for obvious reasons.
I have also set claymore landmines—only in training—and have been responsible for clearing landmines in the past. I refer to a speech I made on 10 July 1998 in the other place, where only I and my noble friend Lord Howard of Lympne, then shadow Foreign Secretary, expressed reservations about the Ottawa treaty, which is of course window dressing—how good we are. As a country, we last exported any landmines in 1982, I believe. I ask the Minister: how many UK anti-personnel landmines have been dug up by any agencies clearing mines since 1982?
I was a trustee and then chairman of the Halo Trust for some three years, and I visited Somaliland, Eritrea, Angola, Mozambique and Cambodia—I think. There was never a British anti-personnel mine found. Since 1998, we have had endless anti-personnel mines laid around the world.
In my dotage, I reckon I could still make an IED, an anti-personnel mine, in my kitchen. I am not intending to, for the benefit of any police, but that is what the Russians are doing in Ukraine. Are the North Koreans, the Iranians and the Chinese joining the convention? I do not think so. We all wish to see an end to anti-personnel mines. I have seen wounded people, back in the 1970s, 1980s and 1990s. I have seen UK soldiers maimed in Afghanistan and Iraq in the recent past. This convention does nothing for them or for peace. It takes away one line of defence from our own soldiers. If in a war we need that defence, British soldiers should have it. In 1998 I said that
“I just hope that there is never an occasion on which British soldiers are left exposed and die because they do not have anti-personnel mines in their armoury”.—[Official Report, Commons, 10/7/1998; col. 1367.]
The Duke of Wellington (CB)
My Lords, I declare an interest as one of my sons and his wife work for the Halo Trust, one of the leading de-mining charities. Also, I am a trustee of the Royal United Services Institute.
This debate is about a very difficult military and moral issue. There is no doubt that anti-personnel mines and cluster bombs disproportionately affect civilians. They make no distinction between combatants and non-combatants. The legacy of laying and dropping these weapons lasts for decades. In Cambodia, there are still mines dropped by the Americans during the Vietnam War. In Kosovo there are still mines dropped by the Americans and the British during the Bosnian war. The United Kingdom has a high moral duty to safeguard this Ottawa convention, of which it was a founder signatory in 1998.
However, 25 years later, the military situation in Europe has changed unimaginably. The Russians have laid hundreds of thousands, maybe millions, of mines in Ukraine, which will take billions of pounds and decades to clear. It is very understandable that the Baltic states and other states bordering Russia and Belarus should feel it necessary to be able to defend themselves against further Russian aggression. Anti-tank mines can normally not be activated by human beings, and they can still be used. Modern technology has developed smart landmines, which can be activated and de-activated remotely. I humbly suggest to the Minister that the Government seek to preserve the principles of the Ottawa convention but attempt to modify it to take account of the new technologies and the transformed military situation in Europe.
Baroness Bennett of Manor Castle (GP)
My Lords, I begin with an experience from 1998 when I was in Cambodia, on a bus going through a village beside a river. Looking out of the window, I spied some faded hazard tape wrapped roughly round a small lump in the road. Getting closer, about as far away as that Dispatch Box is from me now, I realised that it was a small bomb—a cartoon-style cylinder with fins on the end, its head buried in the road. That was not a landmine or a cluster munition. In some ways, it was less dangerous than either for being more visible and more obvious. But it was a reminder that the deadly legacy of war often lingers decades after the conflict ends, and that weapons—particularly the highly portable weapons that we are discussing today—cannot, once let loose on the world, be contained to one place.
That small bomb, I suspect, had been washed to that location by a flood, and landmines can easily be moved that way or by land movement. Yet, as the Mines Advisory Group’s excellent briefing highlights, they were also often moved by deliberate human action. Licit and illicit global trade means that a return to landmines in Europe would rapidly mean their spread to other regions—and within regions where they can easily be moved, either as a complete device or as a source of explosives for improvised devices. At a giant scale, their presence or threat means that farmers cannot go safely into their fields, children cannot play without risk of maiming or death, and often women cannot collect essential water supplies in safety.
I thank the noble Lord, Lord Verdirame, for securing today’s important debate, rich as it has been in varied views, and hope that we will hear shortly from the Minister that Britain, a leading figure in both the 1997 anti-personnel mine ban convention and the 2008 Convention on Cluster Munitions, will continue to support them and make every diplomatic effort to see them upheld and advanced around the world.
Baroness Stuart of Edgbaston (CB)
My Lords, I declare my interest as the chair of Wilton Park. Until now, the key issues were that we were hoping to move towards the treaty’s goal of eliminating landmine possession and use, and clearing the current contamination globally. We were also looking to find new ways to finance and advance that endeavour, but we are moving into new territory now.
Upholding a global norm against possession and their use by any state is becoming far more difficult. Things are changing, and statements by Poland and the Baltic states should be seen in the context that, for the first time in the treaty’s history, a state that is not party to the treaty, Russia, has used landmines on the territory of a state that is a member, Ukraine.
The Baltics and Poland have drawn their conclusions about, first, the military utility of mines and, secondly, the capacity of the treaty to uphold anti-mine norms. We should not be surprised that countries such as Finland are beginning to have similar thoughts. If state parties to the treaty are now reviewing their policy, it is a potentially serious development for the treaty and wider norms, both of which His Majesty’s Government are very committed to.
In June 2024, Wilton Park hosted an event entitled “Preparing for success at the fifth review conference of the mine ban treaty”, ahead of the review conference that took place last November. The noble Lord, Lord Verdirame, who wisely called for this debate, asked for further engagement. I assure the Minister that Wilton Park is ready to facilitate any such further engagement.
Lord Sandhurst (Con)
My Lords, this is a timely debate; I congratulate the noble Lord, Lord Verdirame. We face an acute international crisis and we must remember: Russia never signed these treaties. In his excellent paper for Policy Exchange and again today, the noble Lord explained the reasoned restrictions on withdrawal—in other words, to leave lawfully, a state must complete six months’ notice in time of peace. To leave when at war puts a state in breach, so now is the time.
These weapons are most unpleasant. They leave grave dangers for civilians. Those are important considerations and I do not overlook them, but Sir Ben Wallace has written that the Ottawa treaty prevented the United Kingdom and others from helping Ukraine with effective weapons, yet the Russians use them freely, as and when they like. These weapons drive opponents into confined areas, where they are easier to strike. They have been used to great effect in the Ukraine theatre. They have helped Ukraine defend itself.
To be at war against Russia, itself fighting under no such constraints, would be for us, the United Kingdom, to fight with one hand behind our backs; it would endanger our many fewer troops and make much heavier losses likely. Without them, we lose a deterrent: war will be more likely. That is why our eastern European allies plan to withdraw from the treaties. I am afraid we must do the same.
Baroness Smith of Newnham (LD)
My Lords, the situation in the Baltic states and Poland is rather different from that in the United Kingdom. We need to look at the decisions of those sovereign states that have opted to withdraw from the Ottawa treaty—and, in the case of Lithuania, from the Convention on Cluster Munitions—somewhat differently from any suggestion that the United Kingdom should withdraw from treaties or conventions. The perceived threats to the Baltic states and Poland are very real and, as sovereign states, they clearly have the right to make a decision. The noble Lord, Lord Godson, suggested that perhaps His Majesty’s Government had been critical of Lithuania. Clearly, it is not the role of His Majesty’s Government or the United Kingdom to criticise our NATO partners and allies.
At the same time, there is a very strong sense in which His Majesty’s Government and the United Kingdom need to uphold the treaty obligations to which we are signatories. The noble Lord, Lord Dubs, and the noble Baroness, Lady Bennett, talked about mines still being in place long after wars in places they have visited. In the Falklands in 2017, 35 years after the war ended, there were beaches on which one could not walk because there were still landmines. It took until 2020 for that demining to end. In Ukraine, it is likely to take 10,000 deminers working all year, every year for 10 years to get rid of the landmines that are there already.
We need to stick with our commitments. We need to ensure that the United Kingdom does not breach the international rule of law and that, as far as possible, we stick with treaty obligations so that we do not further risk escalation globally.
The Earl of Effingham (Con)
My Lords, just this week, Finland announced that it will be the latest state to withdraw from the Ottawa treaty, following in the footsteps of Poland, Estonia, Latvia and Lithuania. The fact that so many states, all on Europe’s eastern flank, feel threatened to the degree that they believe this step is necessary clearly demonstrates that we are living in a very different world from when the Ottawa treaty was signed. This was highlighted by comments from the Finnish Prime Minister:
“Withdrawing from the Ottawa Convention will give us the possibility to prepare for the changes in the security environment in a more versatile way”.
Given the time limit, I will ask a number of questions to the Minister. Poland, Finland and the Baltic nations are all members of NATO, and NATO members regularly operate in joint combat units. If the worst were to happen and the United Kingdom found itself dragged into a conflict with Russia, we risk a situation where British troops could operate in the same units as NATO allies who are not members of the Ottawa treaty or the Convention on Cluster Munitions. Given that the UK remains party to these treaties, what is His Majesty’s Government’s assessment of the impact on our troops of not being able to deploy the same weapons as the allies they are fighting alongside?
Equally importantly, what liability would our courageous and valiant British soldiers have for the planting of such weapons that are prohibited for use by British Armed Forces under these two treaties? How would His Majesty’s Government protect any British soldiers from being held liable?
Finally, as I believe the noble and gallant Lord, Lord Stirrup, was implying, we must be prepared to adapt our position on such treaties and agreements as circumstances change, so what assessments and scenario analyses have His Majesty’s Government made, and what are their actionable conclusions?
The Minister of State, Foreign, Commonwealth and Development Office (Baroness Chapman of Darlington) (Lab)
My Lords, I am grateful to the noble Lord, Lord Verdirame, for securing this debate and to all noble Lords who have contributed. We could have done with longer, because this is such a complex issue and, as many noble Lords have said, incredibly timely. I was struck that my noble friend Lord Dubs reminded us, as I knew he would, of the dangers and of the reasons why we helped to lead the formulation of these treaties in the first place. His view was echoed by the noble Earl, Lord Attlee, the noble Baroness, Lady Brinton, and the right reverend Prelate the Bishop of Southwark, among others.
As the noble Lord, Lord Sandhurst, and the noble Baroness, Lady Stuart, said, this debate is more relevant now than it has been in the recent past. The words of the noble and gallant Lord, Lord Stirrup, resonated with me when he said that risk must be proportionate to military advantage and asked us to imagine a threat on our borders—certitude, he advises, is not always possible. I understand his argument, and I think the best thing is for me to set out the Government’s position, including answering the questions, particularly those from the noble Earl, Lord Effingham, on interoperability.
This Government remain committed to the Ottawa treaty and to the Convention on Cluster Munitions. Each treaty plays an important role in the protection of civilians, and we continue to use our best efforts to promote the treaties and their norms. It is for good reason that the UK and a majority of countries have come together to ban the use of anti-personnel landmines and cluster munitions. The human and financial costs of their use are devastating. Long after conflicts cease, civilians—and it is civilians, frequently children, who comprise the majority of victims year on year—continue to be killed, maimed and left permanently disabled by anti-personnel landmines and cluster munitions.
As well as the terrible human cost, this creates a further toll on the long-term development and health systems in countries trying to recover from conflict. Anti-personnel and cluster munitions also deny access to land, further imperilling food security. The direct financial costs of this can be devastating. The World Bank estimates that, in Ukraine alone, fully demining affected territory will cost upwards of $37 billion.
The history of these treaties predates the end of the Cold War. The first efforts to exert legal constraints on landmines were through the Convention on Certain Conventional Weapons, started in the early 1980s. While the CCW’s protocols set minimum standards in how landmines are used, their limitations led to the vast majority of states agreeing to and joining the Ottawa treaty in order to provide for an outright ban on landmines. Meanwhile, international proposals to prohibit cluster munitions date back to the Vietnam War era and were also first discussed in the CCW, which remains an important star chamber for future mechanisms. The UK played a major role in the negotiation of both treaties, and we continue to believe in their role and impact in protecting civilians and military personnel alike. As state parties have fulfilled their commitments, the risks to civilians from the remnants of anti-personnel landmines and cluster munitions have fallen in the vast majority of countries. It is no coincidence that, even among non-state parties, there were no officially confirmed transfers of anti-personnel landmines between 1999 and 2024, and fewer and fewer states produce either system.
However, the Government recognise that Russia’s illegal invasion of Ukraine has created significant challenges, upending the global security environment, raising tensions in the Euro-Atlantic space and undermining international law, including international humanitarian law. This is why the Chancellor announced last week a necessary increase in our defence budget to 2.5% of GDP and a plan to go further in the next Parliament. We will make the UK a defence industrial superpower and ensure that our Armed Forces have the equipment they need to defend our nation and our allies.
The Government’s support for Ukraine remains steadfast. We are absolutely committed to securing a just and lasting peace in Ukraine. This is vital for both Ukraine and wider Euro-Atlantic and international security and prosperity, but a just and lasting peace is possible only if we continue to show strength and provide Ukraine with the support it needs to defend itself against continued Russian aggression. This is why we recently signed a £2.6 billion loan agreement with Ukraine, earmarked for military spending, and a £1.6 billion export finance deal that will supply Ukraine with more than 5,000 air defence missiles.
Like the UK, our allies, particularly those with borders with Russia, have legitimate concerns about their security, and we recognise that they need to take difficult decisions about their own national defence. It is their sovereign right to do so, within the bounds of international law. As I noted in this Chamber in August, we regret that Lithuania took the decision to withdraw from the Convention on Cluster Munitions, a process that was completed last month. None the less, we recognise that Lithuania saw itself as an outlier in the region, and we do not anticipate further withdrawals from the CCM.
Last month, Estonia, Latvia, Lithuania and Poland stated their intention to withdraw from the Ottawa treaty. We have closely engaged with them, as our allies, on this subject for many months, and we are working to understand what these decisions will mean in practice. We will work with them in an effort to ensure that they keep as close to the principles underpinning these treaties as possible to mitigate impacts on both the treaties themselves and the vital humanitarian disarmament norms that they have established. As well as a shared interest in the security of our allies, the UK also has strong defence partnerships in the region through NATO and the JEF.
While we work through any implications of the withdrawals with our partners, we are confident that we will be able to work with partners that are non-state parties. The Convention on Cluster Munitions contains explicit provisions under Article 21 concerning interoperability with non-state parties. Similarly, consistent with our position in international law, the Landmines Act 1998 provides a defence for military operations wholly or mainly outside the United Kingdom where anti-personnel landmines have been or may be deployed by a partner who is a non-state party.
The Act is clear that while it is a criminal offence for British personnel to engage in the laying of anti-personnel landmines or related activities, such as assisting, encouraging or inducing others to do so, other conduct that takes place in the course of or for the purpose of a military operation or the planning of such an operation alongside a state party would be permitted.
To conclude, the Government continue to believe that we can advance both our own national security and that of our allies, and the vital humanitarian norms that protect civilians, which these treaties represent. None the less, we cannot ignore the fundamental change in the geopolitical context that has taken place, and I am grateful to all noble Lords for raising these questions. Just as the UK played a key role in the formation of these treaties, we are happy to take the lead and work with our allies and all interested partners to consider the best way to sustain the important norms these treaties have established in this new context, while at the same time continuing to prioritise our national security.
But simply walking away will not help to achieve this. The UK’s long-term security and that of our allies is served not just by our military strength but through the establishment of and commitment to international norms and rules. The UK’s role should be to respond to Russia’s flagrant disregard for long-established global humanitarian norms by working to protect them, rebuilding confidence in the rules-based order for the long term and demonstrating that Russia is on the wrong side of history.
Net-zero Emissions Target: Affordability
(1 day, 5 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Offord of Garvel
To move that this House takes note of the affordability of achieving the net-zero emissions target by 2050.
Lord Offord of Garvel (Con)
My Lords, how appropriate that this debate should be scheduled on the day after President Trump told the world to grow up, play fair, pay its own way and become self-reliant. The stark reality is that the UK cannot become self-reliant with the most expensive energy in the OECD, hence the title of this debate: that this House takes note of the affordability of achieving the net-zero emissions target by 2050.
I begin by illuminating your Lordships’ House on my personal position on net zero. First, I am not a climate change denier. In fact, in September 2015 I had the great pleasure of going to the North Pole with David Hempleman-Adams, where I witnessed for myself the polar ice cap melting. Secondly, I attended COP 26 in Glasgow in November 2021 as the Scotland Office Minister, where I advocated enthusiastically for net zero 2050 and the leading role the UK played. I pay tribute to my noble friend Lord Sharma, who is in his place today: when the UK took the presidency of COP 26 in 2019, 30% of the world had signed up to the concept of net zero, and when he handed over the role two years later, 90% had done so.
When I recently took on the Opposition Front-Bench role on energy, I had no particular ideology on energy. But, like any sensible business executive taking on a new role, I threw myself into the brief and went on a journey of discovery to learn from external stakeholders and experts what net zero really means for the UK. I shall share what I have found with your Lordships’ House.
Perhaps I should open with just two caveats. The first is from Dieter Helm, considered an expert in these matters and not particularly party aligned. He says that in the UK we have one of the most complicated energy systems in the world. The second caveat is that with the vast sums of money at stake here, there are vested interests which are very loud and very vocal. With those two caveats, let me give your Lordships an overview of what I found on net zero.
In 2004, the UK was energy independent: we could meet our internal demand with our own supply. In the last 20 years, both Governments have reduced their hydrocarbon production such that we now import 40% of our total energy needs, costing £40 billion a year. The result is that the UK now has the highest electricity prices in the OECD: ours are five times those in the US and seven times China’s for industrial usage, and three times the US’s for domestic usage. These exorbitant energy prices mean that the UK has deindustrialised, such that our economy and employment is today 80% services and 20% manufactured goods.
The concept of net zero was to set a target of 2050 whereby we would switch our energy dependence from 75% hydrocarbons to 25% hydrocarbons. Yet today, in 2025, we remain stubbornly dependent on hydrocarbons for 72% of our energy needs, with 40% imported. The reality is that our 20-year experiment with renewables, mostly windmills and solar, has failed because the add-on costs of subsidies, levies and grid upgrades have doubled household bills. Their intermittency means they can never provide reliable and consistent baseload and that we will always be dependent on gas as our reserve.
Meanwhile, renewable storage is impractical. Today in the UK, we have storage for only 30 minutes. Even accessing all the world’s combined storage today would give us only 12 hours. All the while, the upgrades to the grid required to distribute intermittent renewable energy from remote wind and solar farms has been costed by Aurora at £116 billion over the next 10 years. That amounts to £4,000 extra per household or £400 per annum, all of which means that the real cost of renewables is vastly higher than for gas, which can be distributed through our existing grid network, while also being unreliable. Finally, there has been no employment benefit to the UK because most of the capital equipment is manufactured offshore, mostly in China, and only 58% of our highly skilled hydrocarbon workforce is transitioning to renewables and at wages one-third lower, which explains why our highly skilled workforce is haemorrhaging abroad.
In answering numerous questions on this topic, the Minister insists that our energy prices are high because of international gas markets. This is a false narrative. The reality is that from 2008, household electricity prices began to diverge from wholesale prices of gas and electricity, which were broadly stable until 2021 and the Ukraine crisis, so why did household electricity prices accelerate away from wholesale prices faster in the UK than in the rest of Europe in the same period? Indeed, UK industrial electricity prices today are six times the price of wholesale gas, versus three times that in Germany and two-and-a-half times that in France.
Something other than the international wholesale price of gas must be driving higher electricity prices in the UK—and we now know the answer. It is all the subsidies, levies, curtailment payments and grid upgrades required by renewables, particularly offshore wind. Over the next five years, the total cost to households of renewable subsidies and levies is estimated by the OBR to be £95 billion. That is £3,400, or a staggering £680 per annum, per household.
I now turn to baseload. The simple reason why renewables will never be a reliable baseload in any energy system is their intermittency. Sadly, in the UK sometimes the sun does not shine and the wind does not blow. In the UK, gas is relied on as a reserve energy of last resort, or baseload, when the intermittency of renewables means that there is either no supply at peak demand or too much supply at reduced demand. This means that no matter how many wind farms we build, we can never switch off our gas reserve, which in turn results in massive duplication.
As a simple market mechanism, the market price will be determined by the marginal price of switching the gas reserve on and off, which has the grotesque outcome that windfarms are making huge profits based on the marginal gas price rather than on their own costs of production plus a margin. Instead of making our own homegrown gas production cleaner and more efficient, we have weighed it down with the associated cost of offshore wind, such that 50% of the fuel costs of gas power stations are in the form of carbon tax.
Moreover, our gas fleet dates from the 1990s and early 2000s, and is running at only 40% efficiency. Modern combined cycle gas turbines are the most carbon-efficient way to produce power through gas, with emissions at 45% of coal-fired power stations. At current prices, new CCGTs could produce electricity at £65 per megawatt hour, compared with new offshore wind at £90 to £120 per megawatt hour. Their capital cost is £500,000 per megawatt compared with offshore wind at £3 million per megawatt—one-sixth of the price. They also give 100% efficiency, versus 40% for wind. Meanwhile, nuclear remains the most emission-compliant baseload, which is why in France the cost of electricity is half that in the UK.
I turn now to energy security. The geopolitics of 2025 mean that energy is no longer just industrial policy; it is at the very heart of national defence. The UK now imports 70% of its gas, largely from Norway and the USA—thankfully, both friendly nations. Of peak UK gas, 20% comes through the Langeled pipeline between Norway and the UK. What havoc would be unleashed in the UK if that pipeline was ever sabotaged?
It begs the question of why we are shutting down domestic production of oil and gas—which supports an entire sector of 200,000 jobs, brings much-needed tax revenue to the Exchequer and contributes to our net-zero target—while importing gas from the same North Sea via Norway. Why should we put ourselves at the mercy of Chinese imports for offshore wind?
There is an opportunity to reset the geopolitics of Europe. German industry has also been hit by high energy prices, caused by divestment from nuclear and subsequent overreliance on Russian gas. If we want to deweaponise energy in Europe, surely Britain’s role as a clean and efficient homegrown oil and gas producer is crucial to our energy security.
I put it to noble Lords that it is time for a rethink and that 2025 is a good year to reassess net zero by 2050. COP 26, which I attended in Glasgow in November 2021, represented peak global enthusiasm for net zero. The UK led the way, with a commitment to switch from 75% to 25% hydrocarbon use. It is interesting to note that just two months ago, in February, out of the 195 countries party to the Paris climate agreement, only 10 submitted updated climate targets to the UN. Of these, only three G20 countries submitted an updated target, and only one country reaffirmed a 2050 target with a pathway—the UK.
How can it be credible to shut down our homegrown gas baseload, when we account for 1% of global emissions? China is opening one coal-fired power station per week and contributes 31% of global emissions. The fact is that the UK’s extortionate energy prices are damaging our economy, yet the gas both offshore and under our feet in the post-industrial heartlands of central Scotland, the north and the Midlands could generate an exciting new industrial revolution. As good citizens of the world, the UK can legitimately retain the ambition to have the cleanest energy system by 2050, but only if it produces cheaper energy which will increase the prosperity and security of our citizens.
Net zero 2050 is a laudable ambition that was passed through the House of Commons in 70 minutes in 2019, without any real assessment of its achievability. It has now become a straitjacket that is preventing the UK from resuming our place in this modern world as an industrial, technological and military powerhouse. In 2025, it is now clear to see that it is neither practical nor affordable, and it behoves all of us to think again. That is why I am proud that my party and my leader, Kemi Badenoch, has had the courage to grasp this thorny nettle. She made it clear in her keynote speech two weeks ago that net zero 2050 is unachievable. This requires our party in opposition to do some serious work to set out an alternative plan for the citizens and businesses of the UK—a plan that, at its heart, is affordable.
Baroness Curran (Lab)
My Lords and Ladies, I am delighted to speak in this debate this afternoon and to follow the noble Lord, Lord Offord. This is only my second speech in this House, and I am pleased to make it on such a vital subject. I look forward to the maiden speech of my noble friend later.
The specific focus on affordability is welcome, but it gives me cause for concern. I thought it would imply, but it clearly states, the objective that we cannot now afford our commitment to net-zero emissions by 2050. Of course, the most fundamental response to that is: we cannot afford not to. I am tempted to speculate that the shift of policy that the noble Lord refers to perhaps reflects some internal political considerations on behalf of the Conservative Party, but I do not intend to get into that temptation and indulge in any political discussion, because this is too serious and too urgent. We must maintain our focus on the realities of climate change and the necessity of delivering on our commitment to net-zero targets.
None the less, I accept the value of questioning the viability and the detail of targets, because we must guarantee that they are realistic and deliverable. My experience in Scotland is a case in point. The Scottish Government have chased headlines with targets ahead of the UK, without taking the necessary actions, as has been clear to all. Now, their targets are deemed unrealistic, following a damning assessment by the Climate Change Committee, thus undermining the credibility of those targets. Setting targets that cannot be met proves counterproductive and breeds cynicism.
I stand here as a hard-headed Glaswegian who has learned to be sceptical of unworkable, even if worthy, targets. I have lived through industrial and energy transitions that have blighted communities and have blighted generations, and I am on alert for leaders who promise change but do not put in place the means or resources to deliver fair and positive results. But I say to noble Lords and Ladies this afternoon that that is not an excuse for inaction. Yes, question the target and examine the evidence, but avoiding action for reasons of political expediency is unforgivable and is an abject failure of leadership.
In considering the evidence that I argue we should examine this afternoon, let me refer to the words of a Minister in the other place:
“Our latest estimates put the costs of net zero at under 2% of GDP—broadly similar to when we legislated for it … with scope for costs of low-carbon technologies to fall faster than expected”.—[Official Report, Commons, 7/9/21; col. 139.]
That was in 2021, and the Minister making that statement was none other than Kemi Badenoch. Her current repositioning has raised alarm across the political spectrum, not least from our former Prime Minister, the noble Baroness, Lady May, who stated that the target
“is supported by the scientific community and backed by the independent Climate Change Committee as being not just necessary but feasible and cost-effective”.
Moreover, no one should be permitted to make claims about the costs of achieving the net-zero target without factoring in the costs of doing nothing. As the OBR has recently stated,
“unmitigated climate change would ultimately have catastrophic economic and fiscal consequences for the UK”,
and that reality must be faced too. That is why clean energy is properly a central mission of this Government and helps us to maintain our commitment to net zero.
The CBI has said:
“Now is not the time to step back from the opportunities”
of green jobs, warm homes and energy security. It also found that the net zero economy is growing three times faster than the overall UK economy. As has been referenced, we must of course consider the future of the North Sea in all of this—and it is the clean energy mission that offers a hope for the future for the North Sea, with its incredible clean-energy potential.
We know that the North Sea is a maturing basin. Oil and gas production has seen a natural decline of 72% from 1999 to 2023. The industry has lost around one-third of its workforce over the past decade. Oil and gas will, of course, continue to play an important role for decades to come, but we must seize the opportunities of the clean energy transition, harnessing the North Sea’s unique strengths—offshore infrastructure, highly skilled engineers and deep supply chains, boosted enormously of course by the establishment of Great British Energy in Aberdeen.
As I say, I am that hard-headed Glaswegian, and I am clear that as Glaswegians we like to think that we see it as we find it and tell it as it is—and so we must. Of course, as the noble Lord said, we must face the stark realities, as he put it. The stark reality that we must face is climate change and what it will do to us; it is here and it will impact on all our lives. So let us galvanise around the clean energy mission and deliver the targets, because that is the future that our people need.
Lord Teverson (LD)
My Lords, I feel that I ought almost to congratulate the noble Baroness, Lady Curran, on her second speech to the House. I also look forward very much to the maiden speech of the noble Lord, Lord Rees.
I am almost embarrassed to admit that one of my first times as a Front-Bench spokesperson was during the consideration and passing of the Climate Change Bill in 2008, which came about largely because of the report The Economics of Climate Change, from the noble Lord, Lord Stern, which was of global significance. The great thing about that time was the unanimity and constructive nature not just of this House but of the other place as well. In this House, the Conservative Front Bench spokesperson was the noble Lord, Lord Taylor of Holbeach, and the never-to-be-forgotten and still very active the noble Lord, Lord Rooker, was Minister for Defra at that time, before DECC existed. There was unity on the idea that this was something that needed to be addressed.
We were the first globally to have such a comprehensive Act and set a net target of minus 60%, I think it was at that time, for emissions relative to 1990—later changed to 80% during the passage of the Bill. It went through with negligible opposition in both Houses, and since then that unity has continued to grow. As has been mentioned, the noble Baroness, Lady May, introduced and passed net zero for the Act in 2019. In a way, that was the high point of unity in this Parliament.
We then had Rishi Sunak as Prime Minister. To be honest, Mr Sunak was not really interested in this area at all. He took some persuasion to go to his first COP. He went in the end, but his heart was not there. After the by-election in Uxbridge, when Boris Johnson resigned, there was a feeling—mainly because of the ultra low emission zone argument going on—that this was the time to start to question net zero. Mr Sunak did three things; first, he delayed heat pumps; secondly, he delayed the ban on internal combustion engines; and thirdly, he took away some of the plans for energy efficiency on tenanted housing.
However, to give Mr Sunak his due, he unsuspectingly asked his former Energy Minister, Chris Skidmore, to produce a report on net zero independently. For the benefit of the Conservative Front Bench in particular, Chris Skidmore was no bleeding-heart liberal. He came up with these conclusions as part of his report, under the heading
“Net zero is the growth opportunity of the 21st century”:
first,
“The UK must act decisively to seize the economic opportunities”;
secondly,
“The benefits of investing in net zero today outweigh the costs”;
thirdly,
“Net zero can materially improve people’s lives—now and in 2050”;
and, lastly,
“Net zero by 2050 remains the right target for the UK: it is backed by the science”.
That was a former Conservative Front-Bencher—not anybody who would ever be a Liberal Democrat—yet those were his conclusions.
Mr Sunak paid little attention to that and stayed on his retreat. What was the result? He lost 251 seats in the House of Commons last year. I suspect that his move towards Reform was not particularly successful, and that that will continue to be the case.
We now have the leader of the Opposition, first, declaring herself a “net-zero sceptic” and, secondly and more recently, saying that net zero is “impossible” without “bankrupting” the nation. The consequences if we do nothing are, as the noble Baroness just said, far greater. To give two macro examples, the CBI reported a 10% growth in the green economy in 2024 whereas the rest of the economy stayed pretty well as it was. On the micro side, the Government expect the warm homes plan to save individual households £140 per household. That would be far more if we had a proper future homes standard.
The UN climate chief, Simon Stiell, said that climate breakdown
“is a recipe for permanent recession”.
If we follow the Conservative Party down the route it is taking then that is where we are heading. I suggest to the noble Lord, Lord Offord, that he reads his colleague Chris Skidmore’s report to really get how this works.
Lord Stern of Brentford (CB)
My Lords, the road to net zero is indeed the growth story of the 21st century. The noble Lord, Lord Teverson, rightly reminded us that that was the conclusion of Chris Skidmore’s report. I and many others have argued the same.
The clean is cheaper than the dirty across much of the economy. There is rapid innovation in the new technologies. Better energy efficiency is higher productivity. Cities where you can move and breathe more easily are more productive than those where you cannot. Air pollution kills around 35,000 people a year in the UK and maims and disables many more.
The strong and fruitful investment necessary to realise these gains will itself drive growth and productivity. Our economy desperately needs such investment and the increase in productivity it will bring. With good public policy, most of that investment will be in the private sector. There is no horserace between tackling climate change and generating growth. On the contrary, the former drives the latter.
Let us look at some specifics for the British consumer and dispose of the nonsense that the green transition drives up energy bills. I do not recognise the description given by the noble Lord, Lord Offord. For detail of a more serious analysis, I refer him to the outstanding work of the Energy Transitions Commission, chaired by the noble Lord, Lord Turner, who is here today. All the numbers I use will be referenced from tomorrow on the website of the Grantham Research Institute at the LSE.
An average household today spends around £4,000 a year on energy bills and car running costs. Net-zero measures could save between a quarter and a third of this. Allowing for capital costs, a driver could save up to £400 a year by switching from petrol or diesel to an electric vehicle, an average household could save up to £550 a year through energy efficiency, and installing solar panels could save £300 or so a year. Further, there is substantial scope to cut electricity prices by reducing the overwhelming role of gas in pricing, by spreading transition costs over a longer period and shifting them on to gas, where they should be, and by making markets work better over space and time. The issues here concern affordable finance, facilitating the practicalities of change and lowering the price of electricity as lower-carbon and lower-cost options play an ever-increasing role. These will require clear and strong public policy, but staying with the dirty and costly makes no sense.
Let us look at the job opportunities. Currently, the UK’s low-carbon economy generates more than £80 billion in gross value added per year—close to 3% of GDP. It is projected to grow at 10% year on year, as the noble Lord, Lord Teverson, reminded us, and will likely overtake the important creative and financial services sectors within the next 10 to 15 years. It is a big deal. It already generates around a million jobs, with hotspots in Scotland, Hartlepool, Nottingham, and Redcar and Cleveland. Low-cost, low-carbon energy will be crucial to our future in AI and our competitiveness more generally.
Let us look at energy security and resilience. The UK’s dependence on fossil fuels involves great risk. The 2022 invasion of Ukraine triggered a dramatic spike in natural gas prices, household energy bills more than doubled and many were pushed into poverty. It cost the UK Exchequer around £56 billion in emergency support—close to 2% of GDP. A UK fuelled by wind, solar, hydro and nuclear will have cheaper energy and be much more economically and energy secure.
Let us remember why we must go for net zero. On current policies, the world is heading towards global average temperature increases of 2.5 or 3 degrees centigrade. We are fast approaching 1.5 degrees centigrade and the possibility of tipping points which could make climate change unmanageable. Continuing in this way would likely make many large, heavily populated parts of the world uninhabitable through inundation, intolerable heat, desertification, extreme weather events and disease. We have to keep the science right at the forefront. Hundreds of millions, probably billions, would have to move or perish. We would destroy much of the biodiversity and natural capital on which we depend. The effects would be devastating. Delay is deeply dangerous.
Let us also remember that the UK matters. Although we contribute less than 1% of global emissions, we are rightly seen as a leader. Indeed, we were the first G7 country to commit to net zero by 2050 under Prime Minister Theresa May in 2019. COP 26 in Glasgow—I have been to all the COPs since 2006—in December 2021, under a Conservative Government and led splendidly by the noble Lord, Lord Sharma, who is here today, was a landmark. The Liberal Democrats have long championed the issue and I wrote the Stern review for the UK Treasury 20 years ago as a civil servant under a Labour Government. If we fracture or fail, other countries may back off. Let us not lose the cross-party commitment which is critical for investor confidence and the sustainable prosperity we seek.
The world cannot afford the risks that delay would bring. That is the opposite of realism. The UK cannot afford to pass up the tremendous opportunities that lie in the new growth story of the 21st century.
The Lord Bishop of Southwark
My Lords, this is a timely debate. I am very glad to be able to speak in it. I am reminded that the preacher in the Book of Ecclesiastes says:
“To everything there is a season, and a time to every purpose under heaven”,
including—I dare to mention in your Lordships’ House—a time to speak and a time to keep silence.
For the Church, increased costs have a material effect on what we can do, but I am as reluctant as anyone else to tilt at windmills or turbines. Not only the scientific consensus about human activity and climate but the dramatic changes of one’s lifetime—expanding deserts, retreating glaciers, rising sea temperature, extreme weather events—lead me to believe that this is a situation where the option is not “when”, or even “what”, but “how”. As with other great crises, we must shoulder the burden, and it is a challenge to our political leadership to share this task. In the Church of England, we have an exceptionally challenging target set by General Synod of achieving net zero by 2030. The national Church has ring-fenced £190 million to support its churches and clergy housing towards this goal.
In the diocese of Southwark where I serve, and the borough of Southwark, our share of national Church funding has seen 18 of our churches embarking on co-funded projects that will directly reduce our CO2 emissions. Further, 42 of our highest-emitting churches across the diocese have been offered a free energy audit and a starter grant from the Church of England to begin to take action to reduce emissions. We have, in addition, selected two churches—St Bartholomew’s in Horley and St Paul’s in Herne Hill—as demonstrator churches to provide an evidence base to demonstrate that rapid transition is possible.
That said, the need and the investment bring tangible benefits, as we have heard from other noble Lords. Churches and church schools around the country report significant savings in their energy bills as a result. In a wider context, the Energy and Climate Intelligence Unit has reported that the UK’s net-zero sector grew by over 10% between 2023 and 2024, and generates—no pun intended—£83.1 billion in gross value added. The growth in employment in the sector is four times that of the economy as a whole. The lifetime cost of electricity generation for new solar panels, as of 2021, is 11% lower than the cheapest form of new fossil fuel generator, and onshore wind is 39% cheaper.
To continue along this path will mitigate the otherwise fearful future ahead of us. The Office for Budget Responsibility last year calculated that severe weather could cost the UK economy 8% in GDP by 2050. The impact on poorer regions of the world, some of whose Anglican dioceses are linked to my own, will be dramatically greater and will cause a consequent upheaval and movement of populations. That will have major impacts on countries such as ours.
Yet if we pursue net zero by 2050 with the spirit, ingenuity and imagination at our command, and cherish the creation given us, we may yet begin to restore some of the damage our species has done. John Keats wrote:
“O what can ail thee, knight-at-arms,
Alone and palely loitering?
The sedge has withered from the lake,
And no birds sing”.
Little did he realise that his poetry heralded the perils we face if we abandon our vigilance. The challenges of net zero are hard, but they are not unaffordable. The price of hesitation, though, will be irreversible. The time is now.
Baroness Jones of Moulsecoomb (GP)
My Lords, I signed up to this debate out of a sense of duty, because as a Green—I point out to the noble Lord, Lord Stern, that Greens have been saying this for 50 years—I felt I had to put forward the interests of the planet and people, but now I have to follow four excellent speeches that I wish I had made myself. Nevertheless, I feel much less weary about this debate. A lot of us here, I think, know that the question is not about whether net zero will cost the UK money, because we all know that cheaper renewable energy and better insulation will pay us back over time. It is about who pays for the transformation to a green economy, who benefits from the switch away from fossil fuels and how much it will cost everyone if we do not do all we can to stop climate change getting worse.
The previous Government held back progress in a shameful way, and I am very concerned that this Government too are not as focused as they could be on the solutions that are more practical than the ones they propose. Climate chaos will hit our economy hard, whether we reach net zero or not. Global warming is already with us; the increase in the scale of wildfires and flash floods are just the first—quite mild—symptoms. We might focus on the increased energy of an individual hurricane season sucking up energy from the warming air, but it is the growing shift in temperature ranges and droughts that should really concern us. The changes to agricultural productivity around the globe will mean scarcity, inflation, famines and movements of people that could impact very seriously on other areas.
Some Governments will collapse. A country that rebuilds and bounces back from one major catastrophe will eventually collapse if that one-in-a-thousand climate event is repeated year after year. California is one of the most affluent places on earth, yet whole areas have been abandoned by private insurance, and people cannot afford either to rebuild after the wildfires or to move away because no one will buy their house. That is the new normal all over the world. Our economy is part of a global economy, and when parts of that international trade start to collapse, there will be far bigger impacts than Donald Trump’s tariffs.
If we want to know where all the objections to net zero have come from, we have to follow the money. The Conservative Party leader has abandoned net zero by 2050 because she is in the pay of the climate deniers in Tufton Street. She made the announcement immediately after receiving donations from the Global Warming Policy Foundation and the linked pressure group Net Zero Watch. At least four members of Kemi Badenoch’s shadow Cabinet—including her shadow Net Zero Secretary, Claire Coutinho—have also received donations from funders of the group. It was the same under the previous Government, with the fossil fuel lobby writing this country’s laws. The right-wing think tank Policy Exchange got money from American oil giant ExxonMobil. Policy Exchange then advised Prime Minister Sunak on drawing up new laws to clamp down on protesters such as Just Stop Oil. That is two-tier democracy: the people with the big money get access to the Prime Minister to create draconian laws aimed at silencing the people with not very much money.
That is how modern Parliament works. It is systematically corrupt and biased in favour of those with fat wallets. It starts with the fossil fuel industry making money out of killing the planet and ends with Ministers colluding with that destruction by dishing out new licences and tax breaks for North Sea oil and gas. Those who object, even if they do so peacefully and non-violently, are arrested and convicted for just planning a protest—as we saw at the Quaker meeting house just last week.
I am sure that Labour Peers still see themselves as good people—despite all the cuts and the thousands of children thrown into poverty—but the Government are happy for the police to use the draconian law that the previous Government introduced. Labour spoke against it but sat on its hands and let it pass, and now it is not rescinding or repealing it. This Government obviously have some responsibility for the arrests and police behaviour last week. If they think the police did something they should not have done, and if they do not think the police were right, they really ought to start thinking about repealing those draconian powers.
The Green Party wants an end to government by cheque book. We would get rid of all the vested interests that promote the expansion of Heathrow and Luton and the growing number of private jets. We would stop money being wasted on expensive climate cons such as the Drax power station, new nuclear, and carbon capture and storage. The noble Lord, Lord Offord, mentioned something about this; it was so irritating that I had to write it down. He said that “renewable storage is impractical”. Well, so is carbon capture and storage. He should get some more information about that; it is absolutely failing.
We should put solar panels on schools and new homes—all of them, not just token changes for the sake of a photo opportunity. The Green Party would make sure that all new homes become energy producers and that communities, rather than corporations, benefit from the renewable power in their part of the country. This is the way to get people on side with a green new deal—not changing the planning rules, threatening newts and sending in the bulldozers.
Lord Berkeley (Lab)
My Lords, it gives me great pleasure to take part in this debate. I fully support my noble friend’s policy on trying to achieve net zero. We have heard many noble Lords speak about the need to do it—most noble Lords anyway. I would just like to say a few words about how to achieve it, because the issues relate to—as we have heard some noble Lords already mention—cost and reliability. Does the technology work or is it something in the dim, distant future? How is the energy distributed, what fuel does it replace, how it is produced? Of course, there is also security.
I will give two examples. The first is a pump storage scheme, which I worked on—it must be 50 years ago, I am so old now—on the River Severn. The great thing about pump storage—which has now come up again in people’s ideas—is that you can predict when it can produce energy, because you know when the tides are going to come in and out. It is quite simple. The key is to get a good place and planning and the right energy to make that work and produce low-cost energy at a reliable time.
I spoke about my second example briefly in the debates on the energy Bill. I have to declare an interest: I am one of 4 million people who live in a house in the country which does not have gas, and therefore we have to burn oil or use electric. There are a lot of—some 25,000—people working in this industry and it is quite a well-developed source of energy, which avoids you having to convert to air or ground source heating, which, as noble Lords will know, will probably cost between £15,000 and £30,000, and is actually quite beyond most people’s means. The main question is: where does the source of the fuel come from? The answer is it comes from second-hand cooking oil and things such as that.
It also needs distributing. It is worth looking at the way energy needs, assuming they are going to go down the wires in the future, will get distributed around many parts of the country which do not have it at the moment—we cannot see it at the moment.
My noble friend spoke about what is happening in Scotland, and I am told that the cost of increasing the amount of power needed to change the infrastructure in Scotland is somewhere between £900 and £1,300 per home. That is a lot of homes in Scotland. We have to look at the cheapest and easiest way of achieving this without having to change your boiler or having to keep the electric switched on.
This is why the Governments of Scotland, Northern Ireland and the Republic of Ireland have all committed to using these new fuels as a key part of their decarbonisation strategies. I rather worry that some members of our Government seem to be more keen to build a third runway at Heathrow and use second-hand cooking oil to fuel all the planes that may need it. I hope that is not serious, because there is a greater need of this material for other things, besides enabling you to get to Guatemala rather more quickly.
I have two requests for my noble friend the Minister. First, will he acknowledge the needs of the rural, off-grid households within the forthcoming warm homes plan? If not, the Government will not have fully recognised the issues that these households are facing, and it is a serious issue for people who cannot afford it. I imagine that it applies to churches as well, because we do not want to be shivering either in churches or at home.
Secondly, we have the primary legislation in place via the Energy Act 2023 to create the necessary obligation mechanism, which would give the necessary market signals and certainty to the industry to roll out these fuels for home heating and reduce cost to the consumer. It does not need a public subsidy, grants or even Treasury money. All we need, I am told, is the Secretary of State to activate Section 159(3) of that Act and launch a public consultation to gather the views of the stakeholders involved. Will my noble friend commit to that when he responds to the debate?
In the meantime, I congratulate all noble Lords who have spoken in favour of net zero, and let us hope we keep at it.
Lord Howell of Guildford (Con)
My Lords, I am certainly not a climate denier. I believe that world emissions are continuing to rise quickly, despite all our efforts and all the warnings of the noble Lord, Lord Stern, and many others, and the difficulties of controlling the climate seem to be growing rather than decreasing. I am not even against having targets of a kind. Ambitions and targets are all right for Governments to have, as long as people are not misled into thinking that if they spend enough money it will all work when it does not. I am certainly not against John Keats and many of his associates as well; that is a lovely world we all aspire to. But I want it to work for a modern economy and a modern society of social stability rather than bitterness, division and real suffering by millions of people.
There are two gigantic question marks over the present path of our policy. I do not want to get into partisan points, but you can say the pathway was set in the past, but it seems it is being followed with zest at present. These worry me a lot. We are fooling ourselves if we ignore the real problems of these two gigantic questions.
The first is cost. The costs for net zero range widely. The official figure, from the Committee on Climate Change, is £1.4 trillion; it is £3 trillion, according to National Grid; figures of £6 trillion to £10 trillion are batted about as well—Net Zero Watch has those very high numbers; and the Energy Technologies Institute has said that the cost of decarbonising housing alone could be up to £2 trillion. So we are talking about the most enormous resources, and it is irresponsible not to ask in detail where on earth they are going to come from and who is going to pay. I am looking at the capital side—I have not come to consumers.
The Government do not have any money—they say that all the time. We all want a lot more. There are endless demands; there is a huge defence bill looming. The financing of this whole gigantic transition will have to be predominantly from private sources, private capital, working in new forms of co-operation with public capital. There is a whole area of thinking on this, which was addressed very interestingly in the New Statesman about two weeks ago, on how new forms of co-operation can be developed between government and the private sector—there is plenty of money in the private sector around the world, ready to invest in Britain—and how that can be done with entirely new thinking, getting away from the old, stale ideological debates about state and markets. I would love to hear a lot more of that coming out than we hear at present. Not much thinking seems to be going on in that area: too much old ideology, not enough new ideas. That is the first question.
The second question is: where is the clean electricity coming from to replace the whole negativism, the whole abolition of oil and gas, that is hoped for and will of course take many years—perhaps until 2030, 2035 or even 2050? That has to happen if we are serious about a form of net zero and decarbonisation. People are very reluctant to give an answer.
The official line is that we are going to need about 200 gigawatts in all, against our present figure of 65 or 70, of which half, on average throughout the year, comes from renewables at present. Of course, it will be much more in the future. The snag is that for 3,000 hours throughout the year, which is about one-third of the year, there is no wind around the entire British Isles. There is a major intermittency problem, and it has to be addressed. An intermittency fulfilment by generating enough electricity at the rate which I think is coming—about 300 gigawatts or 350 gigawatts—is very expensive, for the simple reason that it cannot be used to earn profits all the time. It sits there idle, and someone has to pay.
We know what the answer is. We know that we must let our much-diminished nuclear system, which was run right down, be restored. There are some huge decisions to be taken: some for SMRs, which are the small, new technologies, and others—I look on this with great reluctance—for still plodding along with the old white elephant giant technologies. Those are full of risk, with investors reluctant to go near them and demanding enormous government input of resources, and, of course, charges on consumers.
There is a proposition I find incredible, following Hinkley, and which is in deep trouble. The chairman of the managing body, EDF, has just been sacked by the French Government and it has been advised not to invest further in foreign areas and to concentrate on cheap electricity for the French. The proposition is to replicate this very bad example at Sizewell. It seems absolute madness and the wrong direction. We should be going for SMRs; the order books are filling up. Other nations are ordering SMRs on every side, and we will be late in the queue. We should get on with it now.
That is the necessity and, unless we face it, we can order new combined cycle gas stations—indeed, we are doing so, because we can see that the so-called decarbonisation by 2030 is going to involve more gas, not less—but the carbon from them will have to be captured by new schemes, of which one, I think, has been commissioned. In fact, we need about 10 or 15 of them, but we have not started on that. The hope of getting there by 2030, however much we spend, is very remote and thin indeed. It is a delusion, and a very dangerous one, which the public will turn on angrily when they realise they have been misled.
It is possible to get a cleaner, better society and an energy transition. In the past, it has happened through markets; this time we are trying to make it happen through the activities of government itself, which is much more difficult, but possible. Whatever we call it, honesty and reality will have to be faced on an unprecedented scale, and that should be a matter for extreme concern in the minds of the governing party.
Lord Freyberg (CB)
I thank the noble Lord, Lord Offord, for initiating this debate. I am looking forward to the maiden speech of the noble Lord, Lord Rees of Easton, whom I warmly welcome to the House.
The need to dramatically reduce carbon emissions to prevent climate catastrophe is clear. As the noble Lords, Lord Teverson and Lord Stern, have said, the Climate Change Committee has established a scientifically sound pathway to achieve net zero by 2050. Our challenge now is ensuring that we reach this target while stimulating economic growth.
The clean energy transition is already under way, with solar and wind offering the cheapest forms of energy generation. This cost advantage is likely to improve further as gas and electricity prices decouple. Households and businesses embracing decarbonisation will see significant financial benefits in the near term. Crucially, we already possess many of the technologies needed to decarbonise. Renewable energy, electric vehicles, heat pumps and energy-efficient buildings are not futuristic concepts; they are scalable, increasingly affordable and often outcompete fossil fuel alternatives.
The construction sector illustrates this opportunity perfectly. Currently, one-third of UK construction materials is sourced internationally, making the sector vulnerable to global price volatility and supply chain disruptions, as exemplified by today’s US tariffs. A smarter strategy would be to develop a robust domestic supply chain using renewable bio-based materials such as hemp, timber and mycelium. This approach would reduce embodied carbon in buildings, strengthen the UK’s industrial base, support rural economies and improve our trade balance. Natural materials also promote healthier environments and enable safer construction practices.
The wider transition to net zero holds similarly transformative economic potential. Green industries offer a platform for revitalising UK competitiveness and fostering regional economic renewal. The path to net zero is not a cost but an investment in future prosperity. However, as the noble Lord, Lord Berkeley, said, this transition must be fair, protecting low-income households and ensuring that regions historically reliant on carbon-intensive industries are not left behind. Government policy has a critical role through targeted subsidies, retraining programmes and smart regulation. Private capital must also have its part, as the noble Lord, Lord Howell, said. With predictable regulation, stable carbon pricing and ambitious procurement policies, we can unleash green investment. The financial sector is already awakening to climate risk. We must encourage a proactive pivot towards opportunity.
Thanks to clear objectives set by Theresa May in 2019, the UK has led the world in attracting foreign direct investment in the renewables sector, excelling in both capital expenditure and job creation. Foreign investors in renewables have committed more to the UK than to the US, Germany, France, India and China combined. In 2022 alone, £55.1 billion was invested, compared with just £0.6 billion in France and £10.1 billion in Germany. The evidence speaks for itself: the net-zero sector is growing three times faster than the overall UK economy.
As the noble Lords, Lord Stern and Lord Teverson, have mentioned, CBI analysis shows that the sector grew by 10.1% between 2023 and 2024, compared with 3.2% for the overall economy. Forward-thinking businesses with ambitious ESG strategies are accessing exclusive financial opportunities. The London School of Economics analysis has found that while reaching net zero initially requires annual investments of 1-2% of GDP, it will generate savings by approximately 2040. While this figure is not insignificant, it is crucial to understand this in context. These investments represent a re-direction of existing capital flows rather than wholly new expenditures.
Let us consider the alternative—the costs of inaction. It was a pleasure to hear the speech of the noble Lord, Lord Stern, earlier. His report and subsequent analyses have made it clear that the economic damage from unmitigated climate change will far outstrip the investment needed for transition. Delaying action only compounds these costs. The Office for Budget Responsibility’s analysis concludes:
“From 2040 onwards, net operating savings are projected to outweigh investment costs. And by 2050, the CCC projects a £19 billion annual saving”.
The same report warned that:
“Unmitigated climate change would ultimately have catastrophic economic and fiscal consequences for the UK”.
The question of whether we can afford net zero is the wrong question. The real question is whether we can afford to continue our high-carbon status quo. The answer is no. The costs of delay are too great and the benefits of action are too numerous. Net zero is beneficial for business, essential for the economy and necessary for our environment.
Lord Sharma (Con)
My Lords, my noble friend Lord Offord noted that, under the UK’s leadership of COP 26, we went from less than 30% of the global economy covered by a net-zero target to nigh on 90%. That would not have been possible without the then Conservative Government showing domestic leadership and ambition—first, in our 2030 emissions reduction targets and then by having enshrined into legislation net zero by 2050. Why did countries sign up to net zero? Why did they sign up to the Glasgow climate pact? Why did they decide that it was time to tackle and take action against climate change?
First—and a number of noble Lords have noted this—countries acknowledged the science that human activity is unequivocally responsible for rising temperatures. Secondly, countries recognised the negative impact of a changing climate on lives, livelihoods and infrastructure in their own countries, and the growing economic and human cost of inaction. I have to say that many of those economic estimates for inaction that have been put forward recently are stark. Unless the world is prepared to act collectively, we will be heading into economic and environmental planetary insolvency. I do not think that that is putting it too strongly.
Thirdly, countries and businesses recognise that the drive to net zero offers enormous economic opportunities for jobs, growth and inward investment. Yes, we have seen some recent geopolitical headwinds, but the reality is that many countries and companies—not least in Asia, where I was a few weeks ago—are sticking with their climate commitments and continuing to invest in clean energy, electric vehicles, hydrogen, SMRs and energy efficiency. They are building their economies for tomorrow.
I agree with noble Lords who have talked about the G20, the biggest emitters, having to step up and do more, but the reality is that every country needs to play its part. Nearly a third of global emissions come from countries like ours whose individual territorial emissions are 1% or less of the global total. It is vital that we all act.
I turn to the cost of net zero in the UK. The Climate Change Committee brought out a report a few weeks ago on the seventh carbon budget and it said that the net cost of net zero will be around 0.2% of GDP per year, on average. The CCC expects that upfront investments will lead to savings during the seventh carbon budget period, and much of this investment is expected to come from the private sector. It is also worth emphasising that the CCC’s net cost estimates have been falling significantly: the estimate was between 1% and 2% of GDP in 2008, it was less than 1% in 2019 and it is 0.2% of GDP today. This is driven by cheaper and more efficient green energy and technologies. I welcome the earlier comments from the noble Lord, Lord Stern, on clean energy.
As there is for the rest of the world, for our country there is a big cost of inaction on net zero. A number of noble Lords, including the noble Baroness, Lady Curran, referenced the OBR’s fiscal risks report. She talked about the 2021 report, but the most recent one has climate change in the top three long-term pressures on the public purse. That report is clear that rising temperatures impact productivity, agricultural output, energy costs and, ultimately, people’s lives and livelihoods.
On the flip side of that coin, there is a big economic opportunity, which a number of colleagues have talked about, in pursuing net zero. The private sector absolutely gets this. Colleagues have referenced the CBI report showing the 10% increase of growth in the net zero sector last year; it is now generating more than £83 billion in gross valued added and supporting almost 1 million jobs in our country. That number is growing, and private investment has driven that growth. I agree that it is key to get more private sector money flowing.
At this point, I want to refer the House to my entry in the register of interests, particularly my chairmanship of the City of London’s Transition Finance Council. The council’s aim is to leverage the UK’s existing strengths to become the best place in the world to raise transition finance in support of the UK’s and the world’s net-zero ambitions. As part of the Transition Finance Council, we will play our part to try to get more private sector money flowing.
Then there is the issue of cross-party consensus. I think that it is cross-party consensus on net zero over the past two decades, which many of us in this House have striven to maintain, which has given the private sector confidence to invest in the UK. I personally believe that a go-slow on net zero will have seriously negative economic, environmental and reputational impacts for the United Kingdom and, frankly, could end up costing the British taxpayer a lot more than keeping on track.
I want to end, as a good Conservative, with the words that Margaret Thatcher said in 1989 at the United Nations:
“The environmental challenge that confronts the whole world demands an equivalent response from the whole world. Every country will be affected and no one can opt out”.
Those are the wisest of words, which every political party should take heed of.
Lord Ashcombe (Con)
My Lords, it is a pleasure to follow my noble friend Lord Sharma. I agree with his last statement, but maybe not everything else. I am grateful to my noble friend Lord Offord for bringing this important debate before the House today, and I look forward to the maiden speech of the noble Lord, Lord Rees of Easton.
The debate is particularly timely given the economic challenges that the UK faces. Growth forecasts have been halved by the OBR and the Bank of England. Economic growth depends on affordable and plentiful energy supply, but energy in the UK is certainly not cheap. Before I continue, I should declare my interest as an insurance broker for the energy industry, predominantly in America.
The UK accounts for only 0.81% of global emissions, as we have heard, according to the International Energy Agency. In contrast, the top three emitters—China, the USA and India—are responsible for over 50% of the world’s emissions yet show little interest in reducing them. China is rapidly building coal-fired power stations, while the US has a clear stance on prioritising oil and gas production over environmental concerns.
The UK’s industrial electricity prices are 62% higher than Germany’s and more than four times the cost of electricity in the USA. This is putting real strain on our economy.
The UK’s energy mix still relies heavily on hydrocarbons, at 72%, with only 8% coming from renewables such as wind, solar and hydro. Nuclear contributes 7% and biomass, for which I have no great love at all, 13%. The goal of achieving net zero is admirable, but at what cost? There is growing concern that the renewable energy sector is receiving a near-unlimited budget while the hydrocarbons sector is increasingly penalised.
How many truly understand their domestic electricity breakdown? It includes the wholesale cost of electricity, network costs and charges for environmental and social programmes. For April to June, the breakdown is wholesale costs of £387, network costs of £544, and environmental and social costs of £168. The domestic customer will be paying a 43% surcharge on the wholesale price to help meet climate change targets.
When combined, according to the OBR, the green levies for all domestic and industrial users are expected to raise £12 billion in 2024-25, £12.9 billion in 2025-26 and £15.2 billion in 2026-27. These are vast sums, yet green energy accounts for only 8% of our country’s energy usage and 37% of the electricity generated.
Lazard’s Levelized Cost of Energy shows that the lowest-cost sources of energy are onshore wind and solar, and combined cycle gas generation. All face significant challenges. Wind is intermittent, the sun does not always shine and geographical and planning constraints limit its potential. Meanwhile, any further licensing of offshore hydrocarbon production is currently under review. There has of course been significant offshore wind expansion, but it has come at significant cost.
North Sea hydrocarbon production is rapidly declining. The NSTA predicts it will halve by 2030. However, estimates by OEUK suggest that 12.5 billion barrels of oil equivalent may remain. The UK oil and gas demand is anticipated to be 13.5 billion to 15 billion barrels of oil equivalent until 2050. In addition, the massive onshore gas potential in the Gainsborough Trough could have a similar impact to shale in the US, increasing tax revenue and reducing import reliance. Importing gas, especially LNG, is far more polluting than producing our own hydrocarbons, as LNG emissions are more than three times higher than domestically produced gas. Some our remaining heavy industries, such as Grangemouth and Scunthorpe steelworks, are under threat. While it may be too late to save some, acting now to encourage the use of our own resources could prevent further damage and even foster advanced industries, such as the energy-hungry AI sector.
It is good that the UK has been an absolute trailblazer in reducing emissions, but it is clear that leading alone is insufficient when the top polluters are unwilling to act. The UK economy is experiencing stagnation, but there is a way forward. We must reduce costs, cut emissions and provide an opportunity for the country to grow, while creating a sense of optimism and prosperity. The key is leveraging our own resources and finding a balanced, practical approach to energy policy that allows for both environmental progress and economic growth.
Lord Turner of Ecchinswell (CB)
My Lords, I declare my interest recorded in the register, which relates to a battery-manufacturing company. Our debate today asks us to take note of the affordability of getting to net-zero emissions, but of course we know that the background is that the leader of the Conservative Party has asserted that getting there is unaffordable, and indeed impossible without a serious drop in living standards. She has also declared that the UK has foolishly committed to achieve net-zero emissions without any plan in place for how to get there.
Nothing could be further from the truth. There are very clear plans set out in the immensely detailed reports of the Climate Change Committee that have been accepted by Governments, both Labour and Conservative, over the past 17 years. The latest CCC report estimates that the overall cost of getting to net zero could amount to around £4 billion per annum over the next 25 years, which would be about 0.2% of GDP over that period. Let me be absolutely clear: that includes incredibly detailed analysis of the costs of the storage and flexibility assets required to offset the intermittency of wind and solar, which is absolutely technologically possible.
I would note, in response to the comments of the noble Lords, Lord Offord and Lord Howell, that there is a tendency for many people to mention intermittency as if they were the first person to think about it and nobody had looked at it before. In fact, it is an issue on which the CCC was focused right from the point in March 2008 when I became the first chair. It has been analysed in detail by many people and is achievable.
Of course, it is possible to debate any of the numerous specific assumptions that the CCC makes. If you look back at old CCC reports, you will find that they have often been dramatically wrong—and most dramatically wrong when I was chair of the CCC back in 2008. But, crucially, all the big errors that we made reflected overpessimism, not overoptimism, about the costs of key technologies.
In 2008, we estimated that the cost of solar PV panels might fall by 25% between then and now. We thought we were being pretty wild, but the cost has fallen by over 95%. In 2011, we believed that the cost of offshore wind in the early 2020s would still be above £150 per megawatt hour, but it is now well below £100. We assumed that battery pack costs, which in 2010 were about $1,000 per kilowatt hour, might reach $320 by 2020; in fact, they reached $150 by 2020 and are going below $100 today.
All of that explains the point that the noble Lord, Lord Sharma, made: the reasonable estimates of the cost of getting to net zero have relentlessly come down, not gone up. Given these cost reductions, it is reasonable to believe that the costs of achieving net zero will be roughly as the CCC estimates. I do feel that anybody who argues against that should tell us which specific assumptions in the CCC reports they consider overoptimistic—but that is not something I have heard in any one instance from the leader of the Conservative Party, nor, I must say, from the noble Lord, Lord Offord, today.
The CCC’s 0.2% of GDP figure adds together investments in the new clean energy system and subsequent operating cost reductions. It is important to recognise what is clearly set out in figure 4.1 of the latest report: because investment comes before operating cost savings, the net cost is higher in the earlier years—a bit over 1% or so of GDP for a decade, but delivering lower costs for the whole economy and consumers from 2040 onwards. That captures the essence of the UK’s net-zero commitment: a small but not zero investment by today’s generation for the benefit of future generations in the UK and across the world.
In 2019, when the CCC recommended a 100% net-zero target, there was close to unanimous support in both Houses and in all major parties for accepting the need for that small but not zero investment. What has changed since then is not reasonable estimates of the cost. It is not that those cost estimates have increased, but we now have political voices who believe that around 1% of GDP is too much for today’s generation to invest on behalf of future generations. That is quite a legitimate argument to make; people can differ in their view of what this generation owes to future generations. But, if you want to make that argument, it should be made explicitly and openly, rather than on the basis of unfounded assertions that the costs are much higher than those that the CCC has estimated.
Lord Fuller (Con)
My Lords, several months ago, as a new Member of your Lordships’ House, I made a proposal for a special investigation committee to try to get consensus around the various numbers that have been bandied around today. My intent was not to rerun the debate about whether net zero is a good thing, but to have a mechanism whereby we could have an honest reckoning with the public about the expense of reaching these targets. At some stage the public need to be helped to see the reality of the situation that applies to them personally, in terms of their finances, comfort and mobility. They need to see the reality of the world as it is, not through the starry-eyed rhetoric of 2007, when 2050 seemed such a long time away. The longer we leave this reckoning, the more expensive it will be, not only in cost but in public support, and the mountain we have to climb will be steeper.
The need for candour is urgent, because we are starting to see the cumulative real-life consequences of all the well-meaning initiatives promoted in the name of net zero. This month, 1,100 people lost their jobs at the Luton van plant, and more besides. The exploration industry has been exported from these shores—an industry where we had global leadership, particularly in my home town of Great Yarmouth. They have all decamped, taking their investment, expertise and tax revenues with them.
We have seen the taxing of glass bottles, which not only reduces the pleasure of opening a bottle of wine but has hammered the local pub. New green airfares make it more expensive to take the family abroad to escape the economic gloom, and we now have the dismal prospect of GB Energy trying to find uses for carbon capture and storage. I never believed for a moment that I would agree with the noble Baroness, Lady Jones of Moulsecoomb, but she and I are as one on that issue.
I do not believe in wasting energy; it is bad for business, for the taxpayer and for our children. In my own business, scope 1 and scope 2 emissions are down by 30% in a year. As a council leader, I reduced our emissions by 70%, to the extent that we disconnected the gas heating from our office, so efficient had we made it. That can be done, but there is a long-term energy transition problem to be solved and we cannot ignore that we are paying twice for every kilowatt—once for the renewables and once again for the back-up. We have the highest energy prices out of 25 countries and our electricity costs are four times that of gas on a kilowatt hour basis. Far from reducing energy costs by £300, the energy price cap has risen by 18% since July. That is unaffordable.
Governments trumpet reductions in emissions but we are all paying the price by deindustrialising. I want to spend a moment thinking about the net-zero systems that count emissions in the UK only. That leads to the insanity of allowing Drax to present itself as a green power station while cutting down American forests and transporting them across continents and oceans, to be burned in North Yorkshire. If a steel plant shuts down in Scunthorpe and we start importing steel from India that counts as a British carbon win, even if that steel is produced using Russian oil or the most polluting Chinese coal. That leads me to the madness of CBAM, the emissions trading scheme and the free carbon allowances, which are tariffs by any other name. These are astonishingly bureaucratic, expensive and complicated schemes that seek to address carbon leakage, but the effect of which is to export British jobs to other parts of the world with weaker standards.
We have ended up in a situation where the primary production of ammonia has been chased from our shores to less efficient places, which does nothing to reduce global emissions. Amazingly, our Government’s CBAM proposals fail to reward factories that somehow reuse and recycle carbon into other industrial processes, while allowing the most polluting producers to fall back on less onerous default mechanisms. By this insanity, we are introducing fiscal incentives to use the most polluting coal-fired ammonia production over the most efficient gas-fired factories closer to home. That is the reality of the rhetoric.
You can still be in favour of net zero while recognising that the accounting systems are taking us down the wrong path. We have sleepwalked into an insane, synthetic economic accounting model that lives only in the minds of Treasury wonks—not in the real world—but whose victims are British steelworkers, glassworkers, ceramicists and car workers: precisely the people the Labour Party was established to represent. We are not going to fix these problems by building a high-cost inflationary tariff wall around our economy, using smoke-and-mirrors accountancy techniques, for the longer we take to get real on the actual costs and consequences of net zero, the longer this accounting insanity will continue. I will give your Lordships an example: Defra recently did an analysis of carbon accounting techniques used on British farms and found that there were 86 competing measurement tools. It is crazy.
We are nearly half way there. Now is the time to pivot from simply wishing for net zero to focus on the real life numbers and valuation methods to test the affordability, at a family level, of the path we have set ourselves out on. We owe it to ourselves to stop the transition of a proud, global trading Great Britain into a deindustrialised, virtue signalling little Britain, sanctimoniously standing alone while everyone else digs and drills, and British industrial jobs are destroyed on the altar of decarbonisation.
Lord Rees of Easton (Lab)
Thank you, my Lords. I begin by extending my thanks to Black Rod and her officers for their support and guidance during my first few weeks. Their warmth and efficiency are a real testament to the high standards of this House, and I am grateful for how welcome they made me, my family and my guests feel.
I also thank the noble Lords, Lord Boateng and Lord Woolley, who introduced me. They have long been an inspiration. There are those who have supported me on my journey as well, including the noble Lord, Lord Hastings, and the noble Baroness, Lady Royall. I also thank my noble friends, the Leader and the Chief Whip, for the leadership they have provided since my arrival.
I would like to take this opportunity to extend my thanks very publicly to His Majesty the King. I have been told that I may be the first person who has benefited from the Prince’s Trust to be raised to the House of Lords—unless anyone knows anything different. At two very important junctions in my life journey I had financial support from the Prince’s Trust. I was able to say to the King that they were not large sums of money, but they were the right sums at the right time. They got me through a door that gave me access to a whole new set of opportunities. That support is one of the factors that made my journey from there to here possible.
When I share who I am, I have to speak of those who went before me. It is a privilege to be able to honour them in this place today. My Jamaican great-great-great-great-grandfather, Samuel Richardson, was hanged by the British in 1865 for participating in the Morant Bay rebellion. I have often wondered what he would have thought or felt as he stood on the gallows and whether my standing here today would have brought him any peace in that moment.
Then there is my Welsh grandfather, John Rees, who was born in Merthyr Tydfil in 1914 to my great-grandfather, a miner known as Tali Essin, and my great-grandmother, Elizabeth Barry, an Irish migrant to south Wales. My grandad was too poor to go to university. He was a brilliant man who never managed to live out the fullness of his potential. At my graduation from Swansea University, my nan told me that he lived his dreams through me. That was a moment of great sadness, but also great joy for me.
I was born the mixed-race child of an unmarried, working-class white woman. I use that blunt language to communicate the various social factors and categories I have lived across. As a young man, I wrestled with identity and belonging. I grew up in the race and class fractures of 1970s and 1980s Britain. I was chased down the street by grown men telling me to go back to my own country. I would return home to my primary caring family, who were white. At the same time, some of my black peers in school would question my blackness and my loyalty. I was illegitimate, we were poor and I wondered where I fit.
That is one of the reasons why, when I speak about identity and belonging, I stress complexity, interdependence and dynamism. I reject simplistic binary options, particularly when we are talking about who is in and who is out. I have often wished that the insights of those of us who have lived across identity frontiers—national, racial, ethnic, cultural or religious identities—could be scaled up to inform and frame the way we have national conversations around identity, belonging and, dare I say, migration. I put it like this: being English does not make me less Jamaican. Being Jamaican does not make me less Welsh. When I found out my great-grandmother was from Ireland, it just made me more me. I wonder if that kind of dynamism can make us, as a country, more us.
I have had a varied—you might say chaotic—career, but I am probably best known for serving as Mayor of Bristol from 2016 to 2024. When I was elected, the noble Lord, Lord Woolley, told me that I was probably—highly likely—the first person of black African heritage to be elected mayor of any major European city.
It was an interesting time to be in local government. We had five Prime Ministers, eight Secretaries of State, Brexit, austerity, the cost of living crisis, the pandemic, social upheaval accelerated by social media, a growing awareness of the climate and ecological crises, and the rise of influencers and authoritarian predatory politicians. During this time I held numerous national and international leadership positions, including with Core Cities UK, the LGA’s city regions board, the Global Parliament of Mayors, the Mayors Migration Council and the Commonwealth Local Government Forum.
It is from these experiences as a city leader that I will share two reflections. First, it is impossible to lead a city and work for its good without shaping the national and international context within which it exists. Secondly, the national and the international challenges we face—climate, migration, health and inequality—cannot be met without the leadership of local government in general and cities in particular. These two are inseparable, and I hope, while I am in this place, to be a voice and an advocate for local and regional government and cities, and to advocate for a maturing of the relationship between the centre and our cities and regions.
It is from that perspective that I come to this debate on net zero, as one of a number of ex and current city leaders who have been incredibly frustrated with the national and international mechanisms through which we have tried to deliver the change the world so desperately needs. Noble Lords may remember the open letter written in November last year off the back of COP, which pointed to a process that was fantastic at getting policy frameworks and declarations but not good at getting delivery—and, ultimately, change will come through delivery.
Noble Lords have made some excellent points on the cost of inaction, so I will not go over those numbers, but suffice it to say that, during the middle of Covid, one of the reflections we shared in Bristol was that we have had a taste of what happens when the natural world asserts its ultimate authority over our human systems. We were able to get out of that, but there is the potential for crossing a line, after which there is no end in sight to the chaos—and the closure of our economy—that is visited upon us.
The second reflection is that there are solutions, and I declare an interest here because I have an ongoing relationship with one of the companies we worked with in Bristol. We did a deal in Bristol called Bristol City Leap, which has unlocked £1 billion of inward investment to decarbonise our energy system over the next 20 years, involving local supply chains and £60 million of social value. Look at London EDGE, a £100 million fund for the decarbonisation of buildings, energy systems and transport networks.
My point here is that it is not all about the national level. So many of the conversations are about what nations are doing, but, at the sub-national level, leadership is happening. Even in the United States, US cities are still looking to do the deals to get the decarbonisation done—for both national and international goals, but for the benefit of their own citizens. In Bristol, we started getting ready for a hotter city. We have warm banks in Bristol at the moment, and we will be looking for cool banks in the future because the city is so hot for its residents. If we solve that, it is a social solution as well as an environmental one, tackling the cost-of-living crisis, improving population health and reducing the demand on public services.
I want to focus our minds on some immediate opportunities coming up. London Climate Action Week is on its way, and I urge us to really think about how we can support UK cities to be on the front line of that, not just standing up and making declarations and commitments but helping to broker the financial deals that those cities need to get done to deliver the futures they want to deliver for their populations. If we can do that in the UK, I believe it has a number of benefits. One is that it can bring that inward investment into our cities that we so urgently need. But it evidences our leadership and extends our soft power. As we look at the sequence of global gatherings leading up to COP that urgently need the voice of cities, I believe that we in this country can set a global standard. But, if we are going to take this as an opportunity, we need to get ahead of it and shape it, not react to it.
Baroness Hayman (CB)
My Lords, it is always a privilege to follow a maiden speaker in your Lordships’ House, but this was more than a privilege: it was a pleasure and a very moving experience for all of us to hear the maiden speech of the noble Lord, Lord Rees of Easton. At one point, he said his background was chaotic. The speech he made about his early life—his experiences and how an intervention from the Prince’s Trust could make an enormous difference and end up being one of the factors that brought him to your Lordships’ House—told me how much we will benefit here from the breadth of experience that he brings.
I think we knew of the noble Lord as Mayor of Bristol; he comes as a Bristolian, and I am sure that that city’s interests will be well represented in your Lordships’ House. But the dimension that he talked about afterwards, how cities are important in the governance of nations and governance globally, is an essential point for all of us concerned with tackling not just the climate issues we are debating today but the social issues we will all face in one way or another. The noble Lord has an enormous amount to contribute to your Lordships’ House, and we all look forward to hearing more from him in future.
Turning to my own contribution to this debate, I declare my interest as chair of Peers for the Planet. I put on record at the outset, because the point has been made by others, how much I regret the crumbling of the cross-party consensus that has served this country so well in our efforts to combat climate change, and which has given us such soft power globally and allowed us to lead so effectively on the international stage. The noble Lord, Lord Offord, has done the House a service in initiating this debate, allowing us to hear some extraordinarily powerful contributions. It is always invidious to name names, but I shall continue by doing so. We have heard from the noble Lords, Lord Sharma, Lord Turner and Lord Stern, people who have huge authority in this area. I hope that the noble Lord, Lord Offord, might share the relevant Hansard with the leader of his party, so she can perhaps reflect on the rather high-level attitude she has taken on these issues.
No one disputes that achieving the Government’s statutory commitment to reach net zero by 2050 will cost a lot of money—although, as many noble Lords have pointed out, a substantial part of that investment will come from private rather than public sources. The noble Lord, Lord Howell of Guildford, is absolutely right that we have to look at innovative ways in which to partner between public and private in this area. But affordability, as this debate has illustrated, is a much more nuanced concept than simply that of price. It is less easy to calibrate, and it involves questions of both the return on the investment we are making and the value ascribed to the outcomes of that investment. It is also dependent on the external environment and changing pressures, as we have seen only too clearly in the altered views in NATO countries, since the invasion of Ukraine, of the affordability of increased defence expenditure.
There is no denying that there will be real technical and capacity challenges, particularly regarding the national grid, and competing interests and trade-offs of particular policies and infrastructure proposals. I certainly would never deny that the high cost of energy we currently face is causing hardships for households and holding back business growth. But there are solutions to all those issues; as the noble Lord, Lord Stern, pointed out, we need to take the right and urgent action to tackle them.
But other things cannot be denied. The overwhelming scientific evidence of the perils facing the world if we do not rapidly reduce global emissions and halt the rise in temperature has only become more compelling year by year. The recognition of that danger is what led to the passing of the Climate Change Act in 2008 and the net zero remit in 2019. The UK’s response through both policy and action on decarbonisation has been of benefit, not only in the global fight against climate change but domestically in the UK, as many have said.
We have reduced our dependence on fossil fuels, improved our air quality and, strikingly, grown our economy. We have established footholds in low-carbon industries and created new markets for exports, as we can see in our world-leading offshore wind sector. The net-zero economy, as others have said, is growing three times faster than the wider economy and each job generates 38% above the UK average in economic value. I will repeat the quote that others have given from last week’s OECD report:
“Accelerated climate action does not hinder economic growth, it provides economic gains”.
We have to recognise that calling a halt to progress is not a neutral or cost-free option. That was the crucial point that the noble Lord, Lord Stern, made in his seminal report. His judgment has been echoed by many others and many organisations. In the words of the CBI’s chief economist,
“inaction is indisputably costlier than action”.
Nothing has changed the imperative of the transition; it has become only more urgent. Our climate is already warming faster than scientists initially predicted. In these circumstances, it is a category error of monumental proportions to suggest that investing to tackle climate change can be treated as just another spending issue, of no greater significance than any other in the annual spending decisions, and airily dismissed as an unaffordable dream. This is not the time to lose our nerve. We need to buckle down with grit and determination to provide certainty for industry and to encourage innovation.
The fundamental reason why we should continue to lead on this issue is that we owe it to those who are immediately threatened by climate change and to our children and grandchildren. As many contributions in this debate have shown, leading nationally and globally to tackle climate change will also be in the best economic and security interests of the UK. Let us not behave like Oscar Wilde’s cynic, who knew
“the price of everything, and the value of nothing”.
Lord Teverson (LD)
My Lords, I apologise to the House. I forgot to declare my interests in the commercial battery storage sector.
Earl Russell (LD)
My Lords, I thank the noble Lord, Lord Offord, for bringing this timely debate and for the clear explanation of his personal position. I also congratulate the noble Lord, Lord Rees of Easton, on his very interesting maiden speech. Clearly, the Prince’s Trust invested well in him. If he does not mind my saying so, I am sure that all his relatives are proud of the speech he has just given.
The question before us is a loaded one, examining only the cost of the transition while ignoring any savings from net zero or the costs of climate change itself. The UK’s territorial greenhouse gas emissions are now 54% below 1990 levels. They are now at their lowest level since 1872, when Queen Victoria was on the throne. Our GDP has grown by 84% during the same period, and the UK’s green economy grew by 10.3% last year, adding £83 billion in GVA.
The costs of achieving net zero have halved from the sixth to the seventh carbon budgets as renewables prices have continued to fall—points that the right reverend Prelate the Bishop of Southwark and the noble Lord, Lord Sharma, have made. There is more to be done, but we have reasons to have hope. Further progress can be made without the proverbial sky falling in.
I want to thank the Conservative Party—the party of the noble Lord, Lord Cameron, who visited the Arctic, of the noble Baroness, Lady May, and the Climate Change Act, and of the noble Lord, Lord Sharma, and others. It is their work that got us here. Just at the point when the Conservative Party should be taking a standing ovation for all it has done, its leader has decided to wave the white flag of surrender—the white flag with a message saying to our young people, “Sorry we have given up. We offer no solutions; we offer no alternatives; indeed, we offer no hope for the future at all”. I question a political strategy which argues that it is worth saving a few pounds today merely to hasten our own communal demise tomorrow—do spend any savings quickly.
I believe in manmade climate change, and I also believe in manmade solutions to it. I am disappointed that we no longer have an all-party political consensus on climate change, as the noble Baroness, Lady Hayman, and others have said. These matters are hard enough when we have a basic level of agreement, and they are made even more challenging when we do not. The noble Lord, Lord Sharma, made the point that this may be one of the most damaging aspects of all, because it will damage inward private investment and confidence and thus probably cause higher prices.
I state unequivocally that achieving net-zero emissions by 2050 is not only affordable but the most economically sound and responsible path forward. Any deviation from this path will just end up costing people more. I disagree profoundly with the recent statements of the leader of the Conservative Party and her self-professed declaration that this vital target is impossible. The dismissal of our legally binding targets is deeply troubling and flies in the face of a huge body of scientific evidence and economic analysis.
The most expensive course of action we could possibly take is to do nothing. The longer we do nothing, the longer we will continue to pay more. The Office for Budget Responsibility has estimated that unmitigated global warming could lead to UK debt growing up to three times larger than our economic output by the end of the century. It also warns of greater and more frequent economic shocks caused by climate change. A study just published by Australian scientists suggests that average per person GDP across the globe will be reduced by 16% even if warming is kept to 2 degrees Celsius. Today, a top global insurance company has warned that the climate crisis is on track to destroy capitalism. The noble Lord, Lord Sharma, spoke of global insolvency resulting from climate change. To ignore these potential catastrophes in favour of short-sighted scepticism is not fiscally prudent; it is a dereliction of our duty to future generations. The noble Lord, Lord Stern, reminds us that we must keep climate science at the forefront of our minds, particularly in the face of Trump’s denial of it.
The claim that achieving net zero will bankrupt the country is simply not supported by any evidence. Analysis by the London School of Economics has found that, while reaching net zero by 2050 will involve initial costs, it is projected to save money by around 2040. The noble Lord, Lord Freyberg, reminded us that the OBR’s analysis of the Climate Change Committee’s plans also indicates that, from 2040 onwards, net operating savings are projected to outweigh investment costs, with a potential £19 billion annual saving by 2050 relative to baseline scenarios. The OBR has clearly stated that the cost of climate inaction is much larger than the cost of transitioning to net zero.
The continued reliance on importing gas is a significant drain on our economy and a major source of economic instability. The Energy and Climate Intelligence Unit has estimated that the UK spent around £140 billion in total on wholesale gas between the start of 2021 and the end of 2024. The surge in energy costs during the gas crisis is a stark reminder of the vulnerability of our energy system to international fuel markets. The transition to renewable energy offers a pathway to greater energy security and more stable and cheaper energy bills. Suggesting that abandoning our net-zero targets and continuing our dependence on the volatile international markets is a more affordable option is utter madness.
Renewable energy now accounts for just under half, or 45%, of the UK’s power generation. The shift towards a low-carbon energy future is not a pipe dream; it is today’s reality. The noble Lord, Lord Stern, said that this is the growth story of the 20th century and the noble Lord, Lord Freyberg, reminded us that the tech is here today.
The Climate Change Committee’s seventh carbon budget outlines an ambitious yet deliverable pathway to net zero by 2050, based on detailed modelling of cost effectiveness and feasibility of decarbonisation options. While upfront investment is required, significant savings and operation costs from more efficient low-carbon technologies will begin to outweigh these investments during the seventh carbon budget period.
The leader of the Conservative Party has claimed that there have never been any detailed plans. The noble Lord, Lord Turner, is right that nothing could be further from the truth. This assertion is unequivocally contradicted by extensive legislation, including that passed by her own party. The comment is disingenuous and ignores the significant work that has been undertaken by so many to date.
The claim that the target is “impossible” simply does not align with the expert analysis and modelling that has been done. The transition to a net-zero economy also presents significant economic opportunities. Being against green technology is the equivalent of saying at the start of the Industrial Revolution that you do not support steam power. The noble Baroness, Lady Curran, reminded us that the net-zero economy is already growing three times more quickly than other sectors. Adding political uncertainty now will only undermine investor confidence.
The noble Baroness, Lady Jones, also raised the important point of the just transition, and it is important that we leave no one behind as we transition. This means supporting workers in sectors that are in need of transition and investing now in the skills and infrastructure required for the green economy. It also requires policies that address the potential for distributional impacts, ensuring that the costs and benefits of the transition are shared fairly across society.
The noble Baroness, Lady Curran, spoke of the emphasis on affordability, and this is a welcome part of this debate. As I have said before—and I say it again—more must be done now to reduce the costs of energy and to improve our energy efficiency. The noble Lord, Lord Stern, is also right that we must work now to reduce electricity prices. I am pleased that this Government will be considering at least some aspects of electricity market reform. These matters require much greater urgent attention from this Government. We must include people and take them with us on this journey. There must be less “done to” and much more “done with”. The citizens’ panel covering the Climate Change Committee’s seventh carbon budget highlighted the importance of upfront affordability and protecting vulnerable groups during this transition. Policies that penalise those who cannot afford the transition are not in people’s interests. It is fundamental to our energy security. We can have cheaper bills and households will save money. It is important that we do not give up hope now.
In conclusion, achieving net-zero emissions by 2050 is not only affordable but an economic imperative and a moral responsibility. The evidence overwhelmingly demonstrates that the cost of inaction far outweighs the investments required for transition. The biggest cost we face is not the investment in our future but the catastrophic price of doing nothing. We must not falter now.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, I thank the noble Lord, Lord Offord, for opening the debate. Like the noble Baroness, Lady Hayman, I have been enormously impressed by the quality of the contributions that have been made by so many speakers. I congratulate my noble friend Lord Rees of Easton on his excellent and memorable maiden speech. His tribute to the Prince’s Trust was particularly noticeable, as was his family history and his extraordinary life journey. We await his further contributions eagerly; I am sure he is going to make a huge contribution to your Lordships’ House in the years ahead.
This has been an interesting debate. The noble Lord, Lord Offord, argued that he was not a climate change denier and spoke about his presence at COP 26, where he advocated for net zero with the noble Lord, Lord Sharma, to whom I pay tribute for all the work he did in his leadership there. The noble Lord then argued that we are no longer energy-independent and we are paying a high price with what he called the deindustrialisation of our country. When it comes to deindustrialisation, I remind him of the Thatcher legacy, which decimated so many industries in our country.
This Government are absolutely focused on the forthcoming industrial strategy. Indeed, my noble friend Lady Gustafsson, sitting beside me, is spearheading the investment that we are to generate in this country because of our great potential. I am convinced that it is the green economy that will fuel much of that investment and growth.
Many noble Lords, including the noble Lord, Lord Offord, suggested that we cannot really afford our net-zero ambitions. The response of the Government is not only that we can afford our net-zero ambitions but that we must—and that we have to drive this as quickly as we possibly can. In a sense, the challenge from many noble Lords to the Government is not that that we are going too fast; it is that we need to accelerate our efforts. Indeed, in our debates on the Great British Energy Bill, that was very much the thrust of many noble Lords’ contributions.
The noble Lord, Lord Teverson, the noble Baroness, Lady Hayman, and the noble Earl, Lord Russell, referred to the loss of consensus, which is indeed very unfortunate. The noble Lord, Lord Sharma, made a very pertinent contribution on that point, suggesting that our consensus laid the foundation for giving confidence to the private sector. I agree with that. I will come on to nuclear energy shortly, but the fact that we have political consensus about the importance of the nuclear sector is vital to long-term investment. Noble Lords will know that, in nuclear, you are investing for decades, so that political consensus is vital.
Another point I would make in response to the noble Lord, Lord Offord, is that I do not believe that suggesting that we should reverse our policy and rely on a declining, super-mature basin, such as the UK continental shelf, is the way forward. I do not underestimate the work that has been done in the North Sea and what the workers have done—and we will need a strategic gas reserve in future—but it is not the answer to the overall issues that we face.
On the climate science, it is absolutely clear that climate change is happening. We are seeing it already; it impacts our everyday lives. As the noble Baroness, Lady Jones, put it, its effects range from severe and damaging heatwaves to heavy rainfall and floods, and from a loss of diversity to an increased risk of wildfires. The noble Lord, Lord Sharma, spoke of the inevitability of countries experiencing economic and environmental insolvency unless we take action. My noble friend Lord Rees spoke of the wider social degradation that we are threatened with. My noble friend Lady Curran, in facing up to the hard facts, was clear that we have to tackle this issue—and very quickly indeed.
On energy security, surely the noble Lord, Lord Stern, was right to discuss the importance of ensuring our energy security and resilience. In fact, the only way to protect bill payers, in the long term, is to speed up the transition away from fossil fuels and towards homegrown clean energy. On the benefits of securing our energy security, the OBR has assessed that responding to future gas price shocks—let alone climate damage from a warming world—could be twice as expensive as the direct public investment needed to reach net zero. Energy security is key to our economic resilience. With households and businesses shielded from damaging price shocks, we will have a more stable and adaptable UK as a result.
I do not underestimate the issue of prices. Of course, it is serious for both businesses and domestic customers. I agree with the noble Baroness, Lady Hayman. I gently point out to the noble Lord, Lord Offord, that the electricity market structure we have and the reliance on the international gas market are inheritances from the last Government. The noble Lord, Lord Stern, said that the best way to protect bill payers and mitigate the energy price spikes we saw in 2022 and 2023 is to deliver clean power by 2030. Low-cost and low-carbon energy is the way forward.
On the issue of what is driving the increase in prices, I say to the noble Lord, Lord Offord, that it is gas prices that are still mostly setting the GB wholesale electricity price, which has driven the recent price cap increases. Around 80% of the increase to the price cap level between quarters 1 and 2 of 2025 is a consequence of the increase in the wholesale price of gas. The noble Lord mentioned social cost and the other costs that are levered on top of that, but I remind him that the structure we have is exactly the same as used by the last Government. As we have more low-carbon sources of generation and flexibility on the system, NESO analysis has shown the greater protection a clean power system provides against gas price spikes.
The noble Baroness, Lady Jones, and I will have to agree to disagree on the value of nuclear. We think it is an absolutely essential baseload for the future electricity structure. The noble Lord, Lord Howell, and I agree on the importance of nuclear, but I fundamentally disagree with his remarks on Sizewell C. It is not a white elephant; it is a crucial development. We are moving towards a final investment decision. I have made the point to the noble Lord that it is a replication—80% above ground—of Hinkley Point C. Following what has been learned from the issues faced over unit 1, the productivity in unit 2 at Hinkley Point C has improved by 30%. The lessons are then being translated to Sizewell C. Certainly, a 3.2-gigawatt power station that will power 6 million homes is a really important part of our future low-carbon structure.
The noble Lord, Lord Teverson, raised a very important point on warm homes. He knows that we have ambitious warm home plans. We have committed an additional £3.4 billion over the next three years, but I accept that this is an enormous challenge that we face for the future.
My noble friend Lord Berkeley raised the issue of off-grid homes. We are looking at solutions to that, and I am happy to have further discussions about it.
On the actual issue of whether we can afford the move to net zero, I say to my noble friend Lady Curran, the noble Lords, Lord Stern and Lord Freyberg, and other noble Lords that surely this has to be seen not as a cost but as an investment in the future. As the noble Lord, Lord Turner, put it, the original Committee on Climate Change estimates were overpessimistic, as the costs have dramatically come down.
We should surely turn this around and see the transition to net zero as the economic opportunity of the 21st century for this country. We have huge opportunities here. It is a chance to create hundreds of thousands of good jobs and drive new investment in all parts of the United Kingdom, benefiting people and businesses alike. The nuclear industry is a classic example where we started from scratch to build new nuclear. The jobs that are being created in areas of the country that have found it very difficult to develop new jobs have an amazingly positive impact. This is what investment in green energy and net zero can bring to us.
A number of noble Lords referred to the CBI report. It is extraordinary: there was a 10% growth in the green economy in 2023 compared with 1% growth overall. If I remember rightly, the report said that there are 950,000 people now working in what one would call the green economy or the net-zero economy and its supply chain. I am surprised that the noble Lord, Lord Offord, does not take some credit for what has been achieved, because that is a very credible achievement on which we want to build in the future. The Committee on Climate Change, in a review of external studies, found that up to 725,000 net new jobs could be created in low-carbon sectors by 2030. I suspect that is another underestimate of the likely outcome.
The other issue here is the long-term consequences of not investing in net zero. There have been so many reports now, and they are objective. The Office for Budget Responsibility—I know that noble Lords sometimes disagree with its conclusions, but it is no soft touch—has been absolutely clear that delaying the move to net zero will cost us even more in the long term.
I was very interested in the right reverend Prelate’s remarks about the contribution of the Church, which I very much acknowledge. I am sorry that some churches have had difficulty in getting planning consent to put solar on their roofs, of which I have some knowledge in the city of Birmingham, but their contribution is very much valued, as is that of many community groups.
My noble friend Lord Rees was absolutely right in exemplifying the work that has been carried out in Bristol but also the need for us to strengthen engagement between central and local government and the role of local authorities in this. We have a Local Net Zero Delivery Group, which met first on 26 February 2025, but I am very happy to talk to my noble friend about how we can build on that work and link with local authorities in the way that has been suggested.
The noble Lord, Lord Howell, spoke of the potential of private finance, as did the noble Lords, Lord Freyberg and Lord Sharma, and my noble friend is very interested in spearheading the Government’s work in encouraging that investment. The UK has many opportunities to crowd in private sector investment. We are a very stable country, we have a legal system that is admired, we have world-leading financial mechanisms, transparent market frameworks and targeted public investment. That is a very good foundation. We estimate that we will need £40 billion of investment mobilised annually over the next five years to reach clean power by 2030. My department’s analysis of Bloomberg New Energy Finance data estimates that total low-carbon investment of around £130 billion will be needed per year up to 2040, which is up from £51 billion in 2024.
We have made significant progress in attracting investment into green sectors. Around the 2024 international investment summit, £34.8 billion of private investment into low-carbon sectors has been secured, ranging from solar to offshore wind and its supply chain and battery energy storage.
Why the UK? That is a question that noble Lords opposite have asked me, particularly during the passage of the Great British Energy Bill. The noble Lord, Lord Sharma, put it so eloquently, because he linked global leadership to action by this country. The two have to go together; we have to show by example if we seek to give global leadership. Why on earth should we not seek that? I find it very puzzling when noble Lords in this House seem to suggest that we should sit back and be a backwater. Surely we have so much to offer. Our role is recognised. It is about the point that the noble Lord, Lord Sharma, made: yes, we are responsible for about 1% of global emissions, but if you put all the 1% of global emissions countries together, we pack a pretty big punch.
The fact is that, whatever geopolitical waves and uncertainties we are going through at the moment, this is an unstoppable movement going towards decarbonisation and net zero. The noble Lord, Lord Fuller, raised a number of points about the global position, and he mentioned China. It is just worth remarking that the International Energy Agency has reported that there will be an absolutely massive increase in the use of renewable energy in China over the next five years.
On the subject of global leadership, I am proud that we were the first country to set legally binding carbon budgets and the first major economy to establish a net-zero target in law. I pay tribute to the previous Government for what they did and the consensus that they achieved.
The noble Baroness, Lady Hayman, said that now is not the time to lose our nerve. I agree. That is why making Britain a clean energy superpower is one of the five missions of this Government in delivering clean power by 2030—which is the base, if you like, for accelerating to net zero by 2050. This, surely, is the answer to the challenges we face on climate change and energy security, affordability and sustainability. They all point in the same direction.
We are also committed to a fair and equitable transition. I accept what the noble Earl, Lord Russell, said about the impact on communities and people. I also accept that we have to explain more about what we are doing and why we are doing it. The real world impact is surely this: not that we are going too slowly, but that we must take action now. The challenges we face in this world are so profound that moving to net zero as quickly as possible is surely what we have to do. I am very grateful to noble Lords for the contribution that they all made to this excellent debate.
Lord Offord of Garvel (Con)
My Lords, I thank all noble Lords who have contributed to this very important debate. I pay tribute to the noble Lord, Lord Rees of Easton, for a very elegant maiden speech. Of course, the whole point of debate is to challenge consensus, and I am delighted that I have been able to do that today. Was it not Benjamin Franklin who said that when everyone is thinking the same thing, no one is thinking?
Allow me to sum up as follows. Our energy is the most expensive in the developed world. This is self-inflicted and it is not fair on ordinary working people, who pay the price. It is grotesque and unfair to see billions of pounds in curtailment subsidies going to owners of what are quite often foreign-owned wind farms, just because the wind blows too hard at the wrong time. Net zero is a laudable aim, but the purpose of this debate is to ask how we reassess it, not remove it, because we are in danger that the public will begin to see this as the biggest transfer of money from the poor to the rich since feudal times. Make no mistake: these green levies and taxes on working people are viewed as attacks on working people and a drag anchor on our industry. We must not allow that to happen or to be the perception.
Therefore, my argument is simply that 2025 is 25 years away from net zero 2050, so this is a good time to reassess the plan in the light of reality and to re-evaluate our energy strategy, with the simple objective that we must make it affordable and secure. We are living in different times from when this was moved in 2019. We need to make our energy affordable and secure. We need to reindustrialise our great nation. We need to get our proud people back to work. We need to be strong and independent in an uncertain world. We may well need to rebuild our military capability to keep us strong and protect our citizens, but above all, we need to give comfort, security and prosperity to all the inhabitants of these islands.
Therefore, it is high time that this House takes note of the affordability of net zero 2050. I commend this Motion to your Lordships’ House.
UK-US Trade and Tariffs
(1 day, 5 hours ago)
Lords ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
The Minister of State, Department for Business and Trade and Treasury (Baroness Gustafsson) (Lab)
My Lords, with the leave of the House, I shall repeat a Statement made earlier in the other place by my right honourable friend the Secretary of State for Business and Trade. The Statement is as follows:
“The UK has a strong and balanced trading relationship with the US worth £315 billion, which supports 2.5 million jobs across both countries. This is second only to the EU, where our trading relationship is worth £791 billion. Yesterday evening, the United States announced a 10% reciprocal tariff on UK exports, and it has today imposed a 25% global tariff on cars. That follows the application of tariffs of 25% on US imports of steel, aluminium and derivative products announced on 12 March.
No country was able to secure an exemption from those announcements, but the UK did receive the lowest reciprocal tariff rate globally. Although that vindicates the pragmatic approach that the Government have taken, we know that while these tariffs are still being levied, the job is far from over for us. We are, of course, disappointed by the increase in tariffs on the UK and on other countries around the world. The impact will be felt among all trading nations. However, I would like to update the House on how the UK can navigate these turbulent times, acting in our national interest and for the benefit of all our industries.
I would also like to take this opportunity to thank my American counterparts, Secretary of Commerce Howard Lutnick, US Trade Representative Jamieson Greer and Special Envoy Mark Burnett for their engagement over the past few months. While any imposition of tariffs is deeply regrettable, from the beginning they promised to make themselves available and they have been true to their word. I look forward to our continued engagement over the days ahead.
As Members will know, since the new US Administration took office, my colleagues and I have been engaged in intensive discussions on an economic deal between the US and the UK, one that would not just avoid the imposition of significant tariffs but deepen our economic relationship. On everything from defence, economic security, financial services, machinery, tech and regulation, there are clear synergies between the US and UK markets. That is reflected in the fair and balanced trading relationship that already exists between our two countries.
I can confirm to the House that those talks are ongoing and will remain so. It is the Government’s view that a deal is not just possible but favourable to both countries, and that this course of action serves Britain’s interests as an open-facing trading nation. I have been in contact with many businesses, across a broad range of sectors, including those most affected, who have very much welcomed this approach. It is clear to me that industry itself wants to grasp the opportunity that a deal can offer and welcomes the Government’s cool-headed approach.
In increasingly insecure times, I have heard some Members cling to the security of simple answers and loud voices. I understand the compulsion, but I caution Members of this House to keep calm and remain clear-eyed on what is in our national interest, not simply to proclaim that we follow the actions of other countries. The British people rightly expect the Government to keep our country secure at home and strong abroad. An unnecessary, escalating trade war would serve neither purpose.
True strength comes in making the right choices at the right time. Thanks to the actions of our Prime Minister, who has restored Britain’s place on the world stage, the UK is in a unique position to do a deal where we can, and to respond when we must. It remains our belief that the best route to economic stability for working people is a negotiated deal with the US that builds on our shared strengths. However, we do reserve the right to take any action that we deem necessary if a deal is not secured.
To enable the UK to have every option open to us in the future, I am today launching a request for input on the implications for British businesses of possible retaliatory action. This is a formal step, and it is necessary for us to keep all options on the table. We will seek the views of UK stakeholders over four weeks, until 1 May 2025, on products that could potentially be included in any UK tariff response. This exercise will also give businesses the chance to have their say and influence the design of any possible UK response. If we are in a position to agree an economic deal with the US that lifts the tariffs that have been placed on our industries, this request for input will be paused and any measures flowing from it will be lifted. Further information on the request for input will be published on great.gov.uk later today, alongside an indicative list of potential products that the Government consider most appropriate for inclusion.
I know that this will be an anxious time for all businesses, not just those with direct trade links to America. Let me say very clearly that we stand ready to support businesses through this. That starts by making sure they have reliable information; any businesses that are concerned about what these changes mean for them can find clear guidance and support on great.gov.uk, where there is now a bespoke web page.
This Government were elected to bring security back to working people’s lives. At a time of volatility, businesses and workers alike are looking to this Government to keep our heads, act in the national interest and navigate Britain through this period. While some may urge escalation, I simply will not play politics with people’s jobs. This Government will strive for a deal that supports our industries and the well-paid jobs that come with them, while preparing our trade defences and keeping all options on the table. This is the right approach to defend the UK’s domestic industries from the direct and indirect impacts of US tariffs in a way that is both measured and proportionate, while respecting the rules-based international trading system.
As the world continues to change around us, British workers and businesses can be assured of one constant: this is a Government who will not be set off course in choppy waters. The final part of our approach will be to turbo-boost the work this Government are doing to make our economy stronger and more secure, including our new industrial strategy. We will strike trade deals with our partners and work closely with our allies for our shared prosperity. We have a clear destination to deliver economic security for working people. We are progressing a deal that can do that, laying the foundations to move quickly should it not, and ensuring that British businesses have a clear voice in what happens next. I commend this Statement to the House”.
Lord Hunt of Wirral (Con)
My Lords, I regret to tell the Minister that the Statement that we heard in the other place, which she has just repeated, has only increased the level of uncertainty that British businesses, workers and families are feeling at this critical time. The announcement of new tariffs is a blow to our economy, making goods more expensive, weakening demand and devaluing the pound in people’s pockets. Tariffs make us all poorer. Free trade, not protectionism, has driven Britain’s prosperity for generations and lifted billions of people worldwide out of poverty.
At a time when our economy is already fragile, I agree with the noble Baroness and her ministerial colleagues that we need cool heads. While I welcome the Government’s stated commitment to securing a trade deal with our closest ally and largest single-country trading partner, we must surely now be honest about what has actually happened. The truth is that the Government have not secured any special treatment from the White House. The Secretary of State and the Minister speak of success, but surely there is little to celebrate. Britain now finds itself in the same tariff band as countries such as Kosovo, Costa Rica and the Congo.
The impact of these tariffs on our industries will be severe. The automotive sector remains burdened by a 25% tariff on £8 billion-worth of car and auto parts exports. Our steel and aluminium industries continue to face 25% on exports, including over £2 billion of derivative products containing high steel and aluminium content. On a volume-weighted basis, our total £60 billion in UK exports will have an effective tax of what I calculate to be 13%.
This is not a moment of triumph for the Government. It is, I suppose, a moment that vindicates those who argued for Britain to have control over its own trade policy, but let us be clear: having control over trade policy means something only if that control is used effectively and, thus far, the Government have failed to do so.
Last week, the Office for Budget Responsibility warned that tariffs such as these could knock up to 1% off GDP. This comes at a time when the UK is already in a per-capita recession and when market confidence is shaky. Our businesses, which should be driving economic recovery, are instead facing increasing headwinds caused by this Government’s decisions.
Instead of supporting businesses, this Government are placing additional burdens upon them. Business taxes have risen, business rates have more than doubled for many, the so-called family business death tax has been introduced, and flawed recycling charges are adding yet another layer of unnecessary cost and bureaucracy. With these challenges mounting, it is no surprise at all that business confidence remains at rock bottom.
Then there is the issue of energy costs, which we have just been discussing. A manufacturer in Birmingham, UK now faces energy bills four times higher than a competitor in Birmingham, Alabama. The Government should be addressing this cost disparity, which has a far greater impact than tariffs; instead, businesses are being left to struggle on their own.
Only last week, we debated the Second Reading of what I termed the unemployment Bill. Overseen by the Secretary of State, it looms large: the OBR has not even been able to quantify how damaging the Bill will be for the economy. We do not need more uncertainty, more costs or more bureaucracy imposed on businesses. I suppose the Government felt obliged to rush that Bill through in their first 100 days and are now panicking and trying to push the Bill through by secondary legislation. Well, I leave that to the Committees of this House to deliver their verdict on.
Labour will, no doubt, claim that these tariffs are beyond its control. But let us remember that the previous Government had already made significant progress towards a US-UK trade deal. When President Trump was last in office, negotiations had reached an advanced stage. However, when the Democrat Party and President Biden were elected, his Administration ended all free trade negotiations. The unfortunate reality is that we could not implement a US trade deal until we finally left the EU, which coincided with the end of President Trump’s first term.
Well, the ball is now in the Government’s court. What have they done? I would contend from these Benches that, instead of securing a deal, they have wasted months; instead of acting swiftly to engage with the US Administration, they delayed; instead of protecting British businesses, they have let them down.
Their failure means that British businesses will now lose out and British jobs will be put at risk. The burden of these tariffs will not be borne by Ministers sitting comfortably in Whitehall but by the small manufacturers, the steelworkers, the automotive engineers and the entrepreneurs who drive our economy forward.
There is another issue that the Government must address: retaliatory tariffs. The Government must recognise the harm that a retaliatory trade war would inflict on British businesses and consumers. Escalating this dispute will not help our exporters; it will only drive up costs, disrupt supply chains and make it even harder for British firms to compete globally.
Will the Minister give this House a clear, binding guarantee that Britain will not escalate the situation by imposing retaliatory tariffs on US goods? The last thing businesses need is yet another wave of uncertainty. The Government must take the responsible path, de-escalate tensions, negotiate a fair outcome and avoid worsening an already dire situation. In her Statement, she referred to the fact that the Government are now launching a consultation period on the dangers of retaliatory action. Why on earth are we embarking on such an exercise? Can we please be brought up to date with the website that has been opened specially today? Indeed, the Statement warned us that more input would be published today. Can she please bring us up to date with what has happened?
May I mention the Windsor Framework? We have to consider the effect on Northern Ireland of what has happened today. Under that framework, there is a duty reimbursement scheme available to assist businesses affected by these tariffs. However, many businesses are still unaware of that support. The Government must do more than just acknowledge its existence. They have to take proactive steps to raise awareness for businesses in Northern Ireland and ensure that the scheme is as streamlined and accessible as possible for businesses trying to navigate these challenging conditions.
Finally, has the Minister read the comments made today by the chief executive of Make UK, the director-general of the BCC, the advisers at the IoD and many other trade bodies, who say what a black day this is for British business. What help can the Government give to lift the veil of uncertainty that they have created today by this Statement?
Lord Purvis of Tweed (LD)
My Lords, this is my first opportunity to ask the Minister questions. I give her my belated welcome to the portfolio. She is in a new world when it comes to the unjustified and aggressive trade war that the United States has been launching. My party was forged out of a campaign for free trade. We broke with others when they introduced protectionism. Our principled position on Brexit was based on a rejection of new barriers, new costs and more bureaucracy for businesses and uncertainty for consumers. These same principles apply to our revulsion at the unwarranted and unjustified applications of the new tariffs.
They are, of course, on top of the pre-announced automotive, steel and aluminium tariffs. We should also recall the existing tariffs on UK exports to the United States. It means that, to take one example that is very close to my heart as I represented a textile-producing constituency in Scotland, the cashmere industry, the highest-quality sustainable product in the world now has a 35% tax tariff on exporting to the United States. What support are the Government intending to provide to some of our key exporting sectors now, rather than waiting until after a consultation? These Benches believe that we should have been consulting in advance of the announcement, as Canada did, not after it, so that we had a prepared proposal for a clear statement of intent, rather than a hope for the best in any agreement.
Part of the Statement today that surprised and disappointed me was the news that only if we have not secured an economic agreement with the US will we propose corrective measures. This means that the timetable of UK actions is in the hands of the Trump Administration, not in the hands of our Government, and that surely is not acceptable. It is our duty to represent the interests of British industry and consumers, not the United States.
Can I also ask for clear language? It now seems that we are simply seeking an economic agreement rather than a free trade agreement. What are we seeking from the Trump Administration? There is a world of difference between a comprehensive free trade agreement and cobbling together a number of bilateral agreements on services and goods simply to make a show of reaching some form of agreement. If the Minister could be clear in the language, I would be grateful.
Furthermore, I sincerely believe that we have showed too much of our market offer to the United States, so it can see clearly the areas where we are willing to cede decision-making: closing tax avoidance for UK companies with profits over €20 billion that are not paying their fair share of tax within the United Kingdom; aligning our AI and data regulations to what the Trump Administration want rather than what this Parliament has legislated for; and reducing agricultural and food standards. Every other country with which we may seek an FTA now knows the areas where this Government are open to ceding ground. That, surely, is regrettable.
Two responses today require more scrutiny: one from the Government and one from the Conservatives. The Statement says that the wholly unjustified tariff rate “vindicates” the Government’s “pragmatic approach”, but we know that, as far as the Trump Administration are concerned, the United Kingdom is in the same category as El Salvador, Guatemala and Uruguay—none of which even flourished a cringeworthy letter from a King in the Oval Office. The worst element of the Trump Administration applying the 10% tariffs is that we are now in the same category as Russia, for goodness’ sake. How is it a vindication of our pragmatic approach if Trump sees trading with the United Kingdom as the same as trading with Russia?
The second argument we have heard today, including a bit that we got from the noble Lord, is that we may have fared better because we are out of the EU rather than in it—but that is only if we are starting from a higher base than what the reality is, with the biggest barriers that we have erected for our near trading neighbours. But the critical point is that the United Kingdom, for goods in particular but for services too, is one of the most interconnected trading economies in the world. Nearly 70% of our exports to the EU are intermediate input to the production of other goods and services, and the majority of UK goods manufactured in the UK are intermediate. Therefore, the majority of the goods that we make source parts and components from the EU, so we are impacted by the 20%. Will the Government’s assessment of the impact be not just a sectoral analysis but a full trade analysis, including all the impacts of what will be applied to our biggest trading market?
Even the former Conservative Trade Minister Greg Hands said today that, as a result of Brexit, we now have a more complex means by which we are steering a path in the US-EU trade war. It is even harder, because the more concessions we give to the United States, the further we move away from the TCA. What is the Government’s assessment of trying to triangulate between the EU and the US? We on these Benches believe that the response has to be deeper co-ordination with the European Union.
Before I close, an element that has not been mentioned today, which is particularly close to my heart, having co-chaired the All-Party Parliamentary Group on Trade out of Poverty for so long, is that this Parliament has debated long and hard about our relationship with developing economies, many of which are being hit very hard by the Trump Administration, and the response of this Government is to cut official development assistance and technical support for trade facilitation for developing economies. Our response is to be silent to the Trump Administration but to cut trade facilitation for emerging economies. This cannot be right for the United Kingdom as a free-trading nation.
As I close, my appeal to the Minister is that we need urgent full co-ordination with Canada and the European Union, not necessarily just on the potential corrective mechanisms that may well be necessary and we believe will be justified, but to ensure that there are fully co-ordinated anti-coercion measures. These are not trade measures being introduced by the Trump Administration; they are economic coercion measures, and it was a tragedy that the previous Government dropped the anti-coercion instrument that we could have continued as a result of Brexit. We need urgent clarification on that.
Finally, we need a European Union-UK-Canada co-ordinated response—I will call it Eureka. In response to the Trump Administration, we need a Eureka moment, not just a wait-and-see approach.
Baroness Gustafsson (Lab)
I thank the noble Lords, Lord Hunt and Lord Purvis, for their contributions. I feel that what I hear is a genuine, shared passion for supporting our businesses here in the UK, but also a sadness at barriers to the open trade that so many of us have valued for so long.
There is a shared desire to avoid escalating retaliatory tariffs. The UK and the US have shared a fair and balanced relationship, one that has benefited both sides for many decades. We will both benefit as we strengthen this relationship further. Of course, we are disappointed by the US announcement last night of the 10% reciprocal tariff on UK exports and by the 25% global tariff on cars that has been imposed today. This follows tariffs of 25% on US imports of steel, aluminium and derivative products that were announced on 12 March.
I understand the desire for clarity and urgency, and for a simple answer that can allay the many fears that are rightly troubling businesses at the moment, but this is a complicated environment and a complicated problem. Unfortunately, complicated problems rarely have simple answers. The reality is that it is going to be a co-ordinated effort, where we work out, together with our businesses and industries, a solution that is thoughtful, pragmatic and calm, informed by the data and not by the emotions that many of us may be feeling.
The Secretary of State has been clear that we will always act in the best interests of UK businesses and consumers. As your Lordships know, throughout the last few weeks the Government have been fully focused on discussions on an economic deal with the US. We remain committed to doing this deal, which we hope will mitigate some of the impact that has been announced. I hope that, as the noble Lord, Lord Hunt, referred to, the House is not reading that there is cause for celebration in any of the news that we have announced. I hear the temptation to turn to the other names on the list of tariffs and draw comparisons, but that temptation is to turn inwards and point fingers. I urge all of us to avoid that temptation and instead think about how we work together with that wider community to support all our domestic economies.
We reserve the right to take action if a deal is ultimately not secured. That is a key part of why we are today launching a request for input on the implications for British businesses of possible retaliatory action. This is a formal step, necessary for us to keep all options on the table, but also to form our understanding of how those key areas will be influenced. This exercise will also give businesses the chance to have their say and influence the design of any possible UK response. After all, we are acting on behalf of those UK businesses. I hear the call by the noble Lord, Lord Hunt, that the ball is now in our court. The Government’s preference is to resolve these tariffs through a mutually beneficial deal. They have also been clear that they will always stand up for that national interest. This is why that request for input is so important: to inform the Government’s preparation of their options.
We know that it is a concerning time for both businesses and consumers, but it is important to note that this Government have made plenty of decisions which will have a positive impact on the economy in the weeks and months ahead. We are putting more pounds in people’s pockets by freezing fuel duty; boosting the minimum wage by up to £1,400 a year; and protecting working people, with no rise in their national insurance, income tax or VAT. Living standards are growing at their fastest rate in two years and the Spring Statement showed that each person will be £500 better off by the end of the Parliament. The OBR has said that the economy will grow every year from 2026 and that our planning reforms will lead to a 0.2% increase of GDP, worth £6.8 billion.
The UK remains an open, outward-looking nation and one of the world’s leading advocates for free trade. We have also joined the CPTPP trading bloc, and we continue to pursue export-boosting trade deals with the Gulf Co-operation Council and industrial giants such as India. Our number one priority is growing the UK economy. A positive trading relationship with all our trading partners, including the US, the EU and all these others, will help us deliver that. I hear the call for a full trade analysis and understanding of when future export opportunities will be available to us.
As we think about the impact on the automotive industry, we think about our key industries in the UK. We have used our industrial strategy to strengthen the UK’s automotive competitiveness. The Budget committed over £2 billion of capital and R&D funding to 2030 for zero-emission vehicle manufacturing and its supply chains. This long-term commitment is a vote of confidence in our automotive industry, supporting investment in its transformation as we accelerate to zero-emission vehicles. There was also over £300 million announced in the Budget to drive uptake of electric vehicles.
Our industrial strategy will continue to be unreservedly pro-business, engaging on complex issues that are barriers to investment, such as energy prices and access to finance and skills—all through the lens of promoting investment. Getting the transition right and supporting the growth of the electric vehicle market in the UK could unlock a multibillion-pound industry and deliver high-paid jobs for decades to come.
How will this impact our neighbours? I am thinking about the Windsor Framework in particular, and the opportunities for businesses to protect themselves through the Windsor Framework duty reimbursement scheme that has been referred to. This scheme is there to support businesses, ensuring that they can use it to mitigate any costs that may come from possible tariffs. Businesses should be able to contact HMRC for any information about the scheme. It will of course be a formative part of the advice to businesses we are giving through the great.gov website.
I understand that working closely with businesses to make sure they have all the information they need is really important. The request for input has been opened and that information is already becoming available. It came online today, and we have already seen a significant number of requests and input coming through that process.
This Government were elected to bring security back to working people’s lives. Businesses and workers alike are looking to this Government to act in the national interest and navigate Britain through this period. We will continue to progress on securing a deal that secures our industries while keeping all our options on the table.
Lord Howell of Guildford (Con)
My Lords, the Minister’s Statement and her answers seem to have completely lacked the time dimension, and I wonder why this is so. President Trump is embarking, in theory, on a huge programme of import substitution, major planning and investment for years ahead. There are some areas in which import substitution will not be possible, and others where it will take three or four years, by which time President Trump will be gone—unless he manages to wangle a third term.
Should it not be our priority to analyse and to navigate our industries through all the complexities of this? We should point out that, in some areas, the attempt to have an import substitution, if it does not succeed, may lead to an improvement in our markets and profitability. Why do we not have a proper analysis, with positive elements put forward to reassure and explain where we are going?
Baroness Gustafsson (Lab)
I thank the noble Lord for the question. Engagement with business has to be at the forefront of this. Often, we interpret this through our own lens—our own understanding and feelings about being on the receiving end of those tariffs. But for some industries, as the noble Lord rightly points out, there could be an opportunity. It is not for us to reflect our perception of these tariffs on to an industry; it is up to us to operate within industry and hear from them about the impacts on their organisations, their employees and their future strategies.
That is exactly why today’s request for input from industry is so important. There has been an ongoing engagement with industry for weeks and months in the run-up to this. We have been talking about the implications of this for business, but it has been on a hypothetical basis. We are now turning that into a far more tactical conversation. What is the consequence of what is happening? How can we, as your government, support you to navigate through this?
Viscount Stansgate (Lab)
My Lords, I do not think that any Member in this Chamber envies the position of the British Prime Minister at such a time, with our relationship with the United States coming under such sudden strain on so many fronts in so short a time, whether diplomatically, militarily or indeed now economically. I think yesterday will be long remembered, sadly, as a day that might prove extremely damaging for world trade. I hope that my noble friend the Minister will agree, however difficult it is, that the sheer uncertainty of all this could in itself have an adverse impact on businesses in this country. But, in the face of all this, I support the Government’s measured approach. If I may use the words of the noble Lord speaking from the Opposition Front Bench, we must keep a cool head.
I understand that my noble friend’s colleague, the Secretary of State for Business and Trade in another place, has asked businesses for further information. I take it—perhaps the Minister could confirm—that this will need to be done quite quickly. As I understand it, although there may be no firm date, 1 May is sometimes referred to as a day by which it might be possible for the United States and the UK to reach an agreement. It will be difficult, and I hope very much that we will remember the principle that Parliament and the Government decide what tax is levied on whom and for what.
Finally, I hope my noble friend will use her good offices with the Government to enable this House to have a debate on these matters before things reach a critical juncture. If it ever came to the point where the United Kingdom decided to take firm action, it would be much better for the Government to know that they have the support of the House.
Baroness Gustafsson (Lab)
I thank my noble friend for that comment, and I agree that the best decisions are often made with cool heads. Sometimes it can be challenging to maintain that cool head, but I think that as a Government we have done well to make sure we navigate that on a calm and pragmatic basis. There is so much uncertainty, and I can feel the desire for clarity in this uncertain world. I feel that the request for input from business is a good way of crystallising some of that clarity, as we understand the impact and possible opportunities for next steps.
But have no fear: although the deadline for that conversation or dialogue is 1 May regarding the request for input, there is continuous and ongoing engagement with our US counterparts about how we draw together an agreement. If such an agreement were to come into place, we have not put any artificial deadline on when that should or should not happen—and nor should we, because it would put the negotiations under undue strain. I am pleased and encouraged that the conversation and dialogue are happening regularly, that they are well received on both sides and that access is able to happen.
So I agree—I hear the need for an informed decision about such responses. A debate on any response, as and when that comes to a position where it is more formed, is absolutely where we can provide some real value, and that would be a worthy place.
Lord Bilimoria (CB)
I congratulate the Minister on her appointment. This is our first interaction. We served on the GREAT campaign advisory council for many years until her ministerial appointment. I am reassured to hear that the Government want to be cool, calm and collected. I am also reassured that the Government are doing their best to try to get a deal with the United States of America. Donald Trump likes deals, so let us try to get one with President Trump.
However, although the United States has £300 billion-plus of trade with the UK, we have £126 billion in services exports to the US—a huge services surplus that nobody talks about—which is not applicable for these tariffs. We should make the most of that strength. Even in goods, we have a small surplus. But the United States is only 13% of the world’s trade. Surely we should work with the other 87% of countries around the world to make sure that we continue with the rules-based multilateral trading system.
Secondly, the Minister mentioned growth, and I will raise one of the best ways to generate growth. I am chair of the International Chamber of Commerce here, ICC UK. The ICC is the largest business organisation in the world, with 45 million members. Before these tariffs were announced, we laid out a plan for growth that could unlock £25 billion in trade growth. By digitising trade, we can take what takes three months on a paper-based trade down to one hour. Why do we not, as leaders, champion digital trade around the world and take a leadership role in these turbulent times?
Lord in Waiting/Government Whip (Lord Leong) (Lab)
Before my noble friend answers the noble Lord’s question, I urge all noble Lords to keep their remarks brief and put questions to the Minister rather than making this Statement an occasion for wider debate. This will allow all noble Lords who wish to receive answers to their questions to do so.
Baroness Gustafsson (Lab)
My Lords, it is a joy to be here with the noble Lord again, and I thank him for his question. Why do we not work with all sides and not just the US? My role is Minister for Investment, and I love trade and investment—and I do not see that this is a matter of decisions. I want to have a strong and vibrant trading relationship with the US, I want to have a strong and vibrant relationship with Europe, and I want to have a strong and vibrant trading relationship with many of the emerging economies. This is something that we can navigate; it is not a situation where we need to pick one at the cost of the other, and I am really excited about seeing how we build and develop on all those trading relationships all around the world.
On growth, I share the noble Lord’s passion. I believe that the digital trade that we have is a huge opportunity. Already there is a lot that we do in the services piece that is worthy of celebration. Stitching that together alongside the digital surely has to be the future of the growth-driving economies that we see coming out of the UK. If I can promise noble Lords one thing, it is that I will be an advocate and ambassador as we champion the growth that we can drive through digital trade.
The Lord Bishop of Southwark
My Lords, I am grateful to the Secretary of State for his cautionary words in the other place, repeated here, about eschewing simplistic solutions and “loud voices”, following the imposition of these arbitrary and unwarranted tariffs, and to the shadow Secretary of State for advocating cool heads. That is vital.
Does the Minister agree that, if the impact of this very regrettable development is to depress economic activity—which is all too likely, sadly—there needs to be a priority assigned to protect the most vulnerable in this country from its effects? Will she further comment on any co-ordinated action with other countries to mitigate the effects on those territories, particularly in the Commonwealth, whose economic resilience is far less than our own?
Baroness Gustafsson (Lab)
I share the right reverend Prelate’s passion for making sure that we are supporting not just businesses and consumers but communities and people—the people who live in the communities that are affected. A fulsome response is one that is felt by all. At this point, we are still hypothesising; we are still understanding what the implication could be, whether a trade agreement could be arranged and whether reciprocal tariffs could be made. We are still at a point where we need to understand and turn that theory into understanding the real impact on our economy, what it may look like and who would be the hardest hit. But absolutely—if this is something where we are going to see communities damaged, we will be looking to think about how we can support them through that.
Viscount Younger of Leckie (Con)
My Lords, of course, it is absolutely right that we should look at what cards we might have in terms of any response that the UK might wish to give. Perhaps, being English, rather than “Keep calm”, it should be “Keep calm, carry on and drink tea”.
I have two quick questions. One is to follow up on what was said by the noble Lord, Lord Bilimoria. He is absolutely right about trumpeting our great strength in financial services but also in business services. First, to what extent are the Government really prioritising that sector? Secondly, on priority in terms of the deal that we are trying to secure, we saw the chart on the BBC of all the different tariffs and percentages in all the different countries. Surely there is already a massive rush of people wanting to speak to US officials. Where does the Minister think we are in the pecking order?
Baroness Gustafsson (Lab)
I thank the noble Viscount for the questions—they are challenging to answer. I shall start with the second question first. Where are we in that pecking order? Unfortunately, we can see only our side of that conversation. I see that there is engagement. This is a dialogue where the phone is being picked up on the other side. Questions are being listened to. I heard the Secretary of State say this morning that he had already today been in dialogue. An ongoing conversation is happening, and I take some reassurance from that that our voice is being heard in that narrative. The noble Viscount is right that a lot of conversations will be happening, a lot of negotiations will be occurring, and I take reassurance that that is being listened to.
On the extent to which we are championing particular sectors, there are examples where we champion sectors regardless of the outcome. We see that in the industrial strategy that we launched, where we have identified those key growth strategies and sectors that will support our future growth. However, as we understand particular sectors that may be impacted, that is one of the driving forces of the request for input that we have had—as we understand where those key risk areas are within our economy but also where the key opportunities are that perhaps we should be championing a little more.
Viscount Chandos (Lab)
My Lords, I recognise that the Government’s priority must be to achieve the best possible outcome in relation to tariffs between the UK and the US. I am cautiously optimistic that this Government will do a great deal better than the Conservative Government did over many years, despite the litany of excuses put forward by the noble Lord, Lord Hunt.
Does my noble friend the Minister agree, however, that we should also throw our weight behind improving the deal for other countries that are, in many cases, facing much higher tariffs than the UK: first, in the interest of the global trading system; secondly, to save low-income countries, as other noble Lords have highlighted, from devastating economic damage—a multiple of the hit that the UK may suffer—and, thirdly, in the interests of the many UK companies whose businesses are based on supply chains between those other countries and the US?
Baroness Gustafsson (Lab)
On my noble friend’s question about the impact not just within the UK but outside, if we think about our supply chains, we see that so many are interconnected and have a fierce reliance not just on the UK, the US or Europe but on so many other countries that pass through those supply chains—especially when we think about things such as digital services that we are championing. Making sure that we support those industries, not just to support their economies and those that could be most in need but to support our supply chains, is something that would ultimately benefit both sides of that equation.
I come back to the fact that, today, I am just speculating, because I still do not understand fully how those tariffs will affect our supply chains and some of the sectors within those other countries. Yes, we need to make sure that we have strong and robust supply chains and are supporting those nations that benefit most from the value of that international trade, but I cannot comment further on exactly what the specifics look like at this point in the absence of more detail.
Baroness Bennett of Manor Castle (GP)
My Lords, the Minister spoke about strengthening the US-UK relationship further and about a positive trading relationship with the US. This tone reflects the Pollyanna approach that seems to bear no relationship to the reality of we saw last night of the great game show-like display in Washington—an attempt to divide and rule.
The noble Lords, Lord Purvis and Lord Bilimoria, spoke about working with the majority of the world’s trading countries—those countries that want to follow the rule of law and an orderly system—yet what we are hearing from the Government is again and again talk of leaving our long-term economic future in the hands of whether or not we are, from one day to the next, in President Trump’s favour. Surely, we must hear more about defending that rules-based order and working together, as the noble Viscount just said?
Baroness Gustafsson (Lab)
We need to think about what those defence options are for particular sectors and how we protect particular industries, such as the steel sector. There are remedies to make sure that we protect some of those key, leading industries that we need to think about. However, I strongly believe that there is an opportunity to expand our trading relationships with nations such as the US off the back of this. A firm commitment to doing our best to secure a trade deal with the US is still the safest and most secure economic way of navigating this challenging path.
The Earl of Effingham (Con)
The Statement says:
“The final part of our approach will be to turbo-boost the work this Government are doing to make our economy stronger”.
Does the Minister agree that, with all due respect, 0.1% of GDP growth in the UK economy since July 2024 is not achieving that goal? What will her priority be to fix it?
Baroness Gustafsson (Lab)
My Lords, 0.1% GDP growth is not enough. This Government have made no apology for putting growth as their number one priority. I think all sides of this House agree that driving up growth can only benefit the UK and the people operating within it. We take it incredibly seriously, which is why conversations such as this feel so at odds with trying to create an industry that thrives in and benefits from an open and free trade environment. It is why many of us feel sad as we think about tariffs, or reciprocal tariffs as a headwind to them.
But we can secure an agreement with the US that allows us to navigate through this. There will come a time when we look back on this in the rear-view mirror and we are able to establish and support a lot of those sectors that we rely on to support growth. We will hold dear a lot of the principles that we have already written down and they will steer us through that, whether it is things such as the industrial strategy or going through and identifying those core sectors that the Government will wrap their arms around and support to make sure that our growth numbers are not 0.1% or 0.2% but 1%, 2% and then beyond as we really try to support it.
But I know that it is not a quick fix. I understand that we cannot just go to the growth cupboard in the corner and take growth out of it. A decision to turn to growth does not drive growth—multiple small cumulative decisions help turn the ship towards something that supports businesses and communities to grow. For example, it is about thinking about how in some instances regulation is acting as a headwind against growth and enabling things such as planning to make it easier for businesses to build factories and data centres in their communities to help drive that growth. We are seeing a lot of those initiatives to try to shape and encourage growth. However, I share the sadness that sometimes, it feels as though, when we are in a world talking about tariffs, that works against some of that growth agenda.
Lord Young of Norwood Green (Lab)
I congratulate the Minister on her appointment. She brings a great deal of business experience to the House. The UK is still a great place to invest in. We have one of the greatest creative economies in the world; we should be pushing that and making it clear. It is not a case for gloom.
Baroness Gustafsson (Lab)
I am shamelessly championing and promoting the UK and all its wonderful benefits wherever I can, and will continue to do so. I am a natural optimist by heart and, even today, I am still incredibly optimistic and excited about the opportunity that the UK presents.