Financial Services and Markets Bill

Andrea Leadsom Excerpts

Consideration of Lords message
Monday 26th June 2023 Commons Chamber

[Tulip Siddiq]

It is a similar story across my constituency. A Labour Government would give the FCA the powers it needs to protect essential in-person banking services, which would help a lot of the constituents the hon. Lady is talking about.

To be clear to the Minister, Labour is not calling for banks to be prevented from closing branches that are no longer needed. We recognise that access to face-to-face services could and should be provided increasingly through banking hubs, be they delivered at the post office, in shared bank branches or by other models of community provision. But so far, only four hubs—I repeat: only four—have been delivered. [Interruption.] The Minister is indicating that there are six, which I do not think is a massive improvement, but I will take it. Six banking hubs have been delivered, about which he seems very proud. Figures from LINK reveal that only a further 52 hubs are in the pipeline. On top of that, many of those planned banking hubs will not even provide the essential in-person services that I am speaking about, so although we welcome the progress made in Lords amendments 72 to 77, there is a lot more to do to ensure that no one is left behind.

I am disappointed that the Government have decided not to back Lords amendment 10 on financial inclusion, for which my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) has been a powerful advocate. The amendment is an important opportunity to rethink fundamentally how financial resilience, inclusion and wellbeing issues are tackled in the UK, and to empower the FCA to confront issues such as the poverty premium—the extra costs that poorer people pay for essential services such as insurance, loans or credit cards.

Although I agree with the Minister that financial inclusion is a broader social policy issue, I do not believe that that is a legitimate argument for rejecting the Lords amendment fully. As the Treasury Committee found it its report last year:

“The regulations made by the FCA, and the manner in which it supervises and enforces those regulations, could have a significant impact on financial inclusion”,

such as restricting the practice of charging the poorest in society more for paying insurance in monthly instalments. That is why the Labour party will vote for Lords amendment 10.

Finally, I will address Lords amendment 5 on sustainability disclosure requirements, and the Government amendments tabled in lieu of Lords amendment 7 on expanding the regulatory principle on net zero emissions, and in lieu of Lords amendment 36 on forest risk commodities. We welcome once again that the Government have finally U-turned and acknowledged concerns that our regulatory system must play a role in protecting nature and ending deforestation. However, as I am sure the Minister will agree, that can only be the first step in ensuring that the transition to net zero and the protection of nature are primary considerations across the financial system. The Treasury’s review of deforestation must be meaningful and put forward concrete proposals. The Government cannot continue to kick the can down the road.

Similarly, although we welcome the new requirements in Lords amendment 5 for the FCA and PRA to have regard to the Treasury’s sustainability and disclosure requirements policy statement, we have been calling on the Government to move on that for months. Even now, the Government have yet to confirm the date on which the sustainability disclosure requirements will be introduced. We need clear timing and direction so that we give businesses the confidence to invest and do not undermine their certainty.

The Labour party will support the amendments. As I am sure the Minister knows, I will continue to hold him to account on his actions regarding green finance, financial inclusion and in-person banking services.

[Dame Andrea Leadsom (South Northamptonshire) (Con)]

May I start by sending my condolences to my fellow Treasury Committee member, the hon. Member for Mitcham and Morden (Siobhain McDonagh)? Her sister will be greatly missed by Members across all parties.

I am delighted at the Bill’s progress. I congratulate my hon. Friend the Minister on all his work in taking into account the views expressed across the House. Of course, the existence of the Bill is a huge Brexit dividend in itself, enabling us to deregulate while strengthening financial services in the UK, which is in the top two financial services sectors in the world and creates up to 2 million jobs right across the UK.

So far, the Treasury Committee has proven to be a good overview body for the financial services and markets regulation that is coming back to the UK. That Committee has done a great job, and I can say that without appearing to boast because I was not on the Committee when it did that scrutiny. We have done a good job, and the Treasury Committee will continue to be the right place to provide the scrutiny and checks and balances that will always be needed in the financial services sector.

I point out, however, that their lordships need carefully to consider their approach to the Bill. Far from enabling us to seize the opportunity and recapture the initiative, they seem to be trying to over-burden the regulators, pinning them down with reports and further obligations and duties that would militate against the UK continuing to be one of the most successful places on earth for financial services.

[Peter Grant]

As a counter to that point, is the right hon. Lady as concerned as I am about the fact that, as well as being a successful breeding ground for financial services businesses, the United Kingdom is now seen worldwide as one of the best places to commit financial fraud?

[Dame Andrea Leadsom]

The hon. Gentleman raises an extremely important issue. He will know that huge efforts are being made to clamp down on financial fraud. It has been an insoluble issue over many decades, and of course, with advances with technology and so on, scammers and financial fraud continue to be a big problem, but that does not detract from the fact that the UK is hugely successful in financial services. I predict that the UK will also be hugely successful in green financial services around the world, enabling the net zero transition to take place using UK expertise and exports in that crucial area.

I was delighted to see the new competitiveness and growth objective, and that the PRA and FCA will be required to provide reports on how well it is being addressed. The Treasury Committee has taken evidence from both organisations, which welcome the opportunity to focus not just on stability but on how it affects our competitiveness around the world. That is important and represents a big opportunity for UK plc.

The complaints function is a great initiative that will definitely address the absolutely valid concerns of so many constituents across the UK about the poor behaviour in some of the responses to inquiries led by the FCA or the PRA. That independent, Treasury-led complaints function will be very important.

It is vital that my constituents in South Northamptonshire can have access to cash, so I am delighted that an obligation to ensure that that remains the case will be enshrined in this legislation. I share the concerns of the hon. Member for Hampstead and Kilburn (Tulip Siddiq) about the closure of banks. The Government initiative to create a new arrangement for post offices to provide “the last bank in town” services was a good one. I wonder whether over time we can expand that, because the loss of banks continues to be a big issue.

Finance (No. 2) Bill

Andrea Leadsom Excerpts

Report stage
Tuesday 20th June 2023 Commons Chamber

[Harriett Baldwin]

I thank the Financial Secretary for that intervention, which is very much in the spirit of what we are calling for in our new clause. Our report set out the sorts of things we would like to see. The report from the Treasury should be annual and it should include international comparisons, where available. It should also set out what the Treasury has done within that year to simplify taxes for our constituents and those who run businesses.

[Dame Andrea Leadsom (South Northamptonshire) (Con)]

Let me add that we want to see real examples of simplification, as the tax code is so incredibly long and confusing. Just today, I was talking to people from some businesses that have found it impossible and extremely expensive to work their way through that tax code. As the Chairman of the Treasury Committee has set out, some concrete examples would be crucial in any report that came to the Committee.

[Harriett Baldwin]

I thank my right hon. Friend for that intervention, which made me think immediately of the measures in this Bill on the increased rate of corporation tax. That in itself is controversial, but we now have these ladders between 19% and 25%. Our Committee would be interested to see the letter that the Financial Secretary has undertaken to write to us annually include an assessment of not only new measures such as that on the behaviour of businesses—I highlighted the impact of the VAT measures just now—but of the existing body of tax law. As with the simplification of the lifetime allowance, we must ensure that this Treasury and these Treasury Ministers focus relentlessly on how they can simplify the complexity and the behavioural signals that our tax system is sending, which are deterring people from entrepreneurialism, taking on extra work and earning higher incomes. With that, I am happy to have spoken to those two amendments.

--- Later in debate ---

[Dame Andrea Leadsom]

Just to clarify, will the Minister include in her assessment a simplification of the cliff edges that the Chair of the Treasury Committee raised? We have taken quite a lot of evidence on that, and it really does create disincentives to invest, to work and so on.

[Victoria Atkins]

That is a very interesting point. I hope the Chair will not mind my saying so, but when I gave evidence last week, quite rightly I was challenged about how we measure success. This is incredibly complex, as my right hon. Friend will appreciate. For example, with the corporation tax rises, we have introduced the tapering because we have the policy intent of trying to help businesses that are small or perhaps finding their feet, and we do not want to be charging them 25% corporation tax if they have not reached the levels of profit set out in the Bill. The metrics we will use are very much being considered. I am not in a position to commit to those metrics at the moment, but I promise I will come back to her when we have a settled package that we think will address not only the concerns of the Committee but the wider concerns beyond simplification, such as fairness and encouraging growth.

HMRC also reports annually in its reports on its objective to make it easy to get tax right. As I have just set out, we are actively considering how to develop a suite of metrics to measure progress on that. Precisely because we recognise the concerns and the thoughtful considerations of the Treasury Committee and others across the House, I was very pleased at being able to intervene on my hon. Friend the Member for West Worcestershire to commit today to reporting annually—that is, in each tax year—to the Committee to provide an overarching summary of the Government’s progress on the simplification. To be very clear, I intend that to start this tax year, because I take this very seriously and I very much hope that Committee members and others in the House will share my intentions in so doing. I therefore hope that my hon. Friend and Committee members will not feel the need to press their amendments and new clauses.

I turn now to the subject of the global minimum tax legislation, which is again a complicated area. If I may, Madam Deputy Speaker, with your munificence, I will just spend a little bit of time on it, precisely because I understand the concerns that my hon. Friends have and, indeed, the level of scrutiny they have quite rightly given it as the Bill has made its journey through the House. First and foremost, if I may—I am very keen to get this on the record, because I know that my right hon. Friend the Member for Witham (Priti Patel) will rightly expect such commitments on the record—before I make the commitments that the Chancellor has made in his letter, I will set out the background to pillar 2. Although my right hon. Friend the Member for Witham clearly has a great deal of knowledge about this area, it is fair to say that not everybody in Parliament will have the same understanding.

By way of an explainer, pillar 2 will ensure that large multinational groups with revenues of more than £750 million pay a minimum effective tax rate of 15% in every jurisdiction they operate in. It is designed to protect against the risk of harmful tax planning by multinational groups and to promote fair and open competition on tax policy. It is really to prevent those large multinationals from shifting profit out of the UK to those parts of the world that charge far lower tax rates than us. This will help to ensure that profits generated here in the UK are taxed in the UK, and it will strengthen the UK’s international competitiveness through placing a floor on the low tax rates that have been available in some countries.

A lot of questions have been asked about implementation, and I shall go into detail on them in a moment, but if we do not implement these rules, the tax will still be collected, but by another jurisdiction. That is because pillar 2 is designed as an interlocking set of rules ensuring that low-taxed profits will be taxed even if the UK or other countries do not move ahead. This is why we are determined to introduce or implement pillar 2 from 31 December this year, along with other EU member states and with Australia, Canada, Japan and Switzerland, so that we are moving in lockstep with our international peers.

Before I answer some of the questions that my right hon. Friend the Member for Witham has rightly raised, let me put on record my sincere thanks to her, and to other colleagues and friends who signed her amendment—and to whom I have spoken over many months in the run-up to today—to scrutinise what this means for the United Kingdom and for businesses. I absolutely understand why they are asking the questions. As I said, this is Parliament at its best, and I am genuinely grateful to her for raising these questions. What is more, the Chancellor is grateful. My right hon. Friend wrote to the Chancellor, and I am pleased to inform the House that he replied to her in the following way, to ensure that we all understand and appreciate the levels of scrutiny that have taken place.

The Chancellor maintains that the Government are sadly not in a position to support the amendment, but we recognise the importance of these matters to hon. Friends and Members of the House. On that basis, the Chancellor and I are happy to provide an update on pillar 2 implementation as part of the forthcoming fiscal event in the autumn, and if necessary in the spring. That update will include the latest revenue forecast from the OBR—that is an important point—and a status update on international implementation, which is a point that hon. Members are focused on. It goes without saying—I hope my right hon. Friend and others know this—that the Chancellor and I stand ready and are happy to continue to discuss such issues with her and others, as we move towards implementation towards the end of the year.

Quite rightly, my right hon. Friend and others have posed questions, and I will try to answer some of them. I was asked about implementation, which I completely understand. The member states of the EU are committed to implementation, and the EU directive in place is legally binding. The directive allows small member states—defined as those with 12 or fewer parent entities, and, therefore, those that are much smaller than our economy—more time to introduce the rules. Those countries are very few, and are not in the same economic position as the United Kingdom. They will not get an advantage from delaying implementation, as the directive requires other EU member states to collect the tax instead.

I have also looked to countries such as Thailand, Singapore and Hong Kong. The UK has a large and mixed economy, where it is appropriate for us to take action to combat aggressive tax planning and support measures that support competition. Australia, Japan and Canada, which are our peers by size and shape of economy, are also implementing that rule. Indeed, Japan’s 2023 tax reform Bill was enacted after passing Japanese procedures in March. It will be introducing the income inclusion rule from 1 April, four months after us next year.

On the States, I understand why the question is being posed, and my hon. Friend the Member for Amber Valley set out some of the history behind where America has got to. In 2017, the US introduced a minimum tax on the foreign income of its multinationals, and it has recently introduced a minimum tax on the domestic income of large groups, including foreign headed multinationals. The US already has in place rules that operate on a similar basis to pillar 2, and it has been one of the strongest advocates for developing a global standard. It has maintained its commitment to align its rules with the agreed pillar 2 template, but until that happens, the OECD inclusive framework members, including the US, have agreed how the US rules and pillar 2 rules should interact, to ensure that US multinationals are subject to the same standard as groups in other countries. That is an important context.

If it is not implemented in the UK, what does that mean? Again, the question posed is a fair one. Generally, the international top-up tax is applied at the top of the business, and at the level of the ultimate parent entity. If that jurisdiction has not implemented the rule, the taxing right passes down the ownership chain of the business, until there is an entity in a jurisdiction that has implemented the rule. This is why without UK rules, this tax—chargeable in the UK, if it did apply—would be payable to another jurisdiction unless and until we implement the rules.

I very much understand the concerns raised about sovereignty. We retain the sovereignty to set our corporation tax rate. It is still the lowest in the G7, and we can use important tax levers to boost investment, including the UK’s world-leading R&D credit and full expensing regimes announced in the Budget. We have also ensured that UK tax reliefs such as the refundable R&D credit will not be treated as depressing the effective tax rates of claimants. We have been able to achieve that because we have been at the forefront of discussions and negotiations on these rules.

On the point about how these rules are agreed, implemented and who holds who to account, the model rules were agreed by consensus requiring the agreement of each country and jurisdiction. It is then up to each country and jurisdiction to implement the rules. There is not a higher body than jurisdictions here to do so. I very much understand the concern about innovation and growth. We will remain free to use the corporation tax system to support innovation, business investment and regional growth through R&D tax credits, enhanced capital allowances and tax reliefs in investment zones. We must continue to work together with our partners to avoid a subsidy race that could distort trade or impact sectors.

In answering those questions, I hope I have addressed some of the issues that Members have raised in relation to pillar 2. I very much hope that my right hon. Friend the Member for Witham, having brought the scrutiny which would be expected from her, will feel able not to press her amendment to a vote.

On the lifetime allowance and the Opposition’s new clause 1 and amendments 1 and 6, the Opposition just do not seem to get it. This measure has been brought forward to help the NHS retain those doctors and consultants whom we are so desperate to have in our NHS looking after our constituents and helping to cut the backlogs, as the Prime Minister has set out as one of his five priorities. That is why we have introduced this policy. The hon. Member for Ealing North (James Murray) seems to think—and we have had this conversation many times before—we could have dreamt up a proposal dealing just with doctors in the same amount of time it took us to bring in this policy—two weeks. The fact is that this measure started having an impact on our doctors, our consultants, our chief constables and others this tax year, as hon. and right hon. Friends have set out. We want to make that change precisely because we believe that our NHS and public services deserve it, and that is why we are bringing that lifetime allowance forward.

Moving to the non-doms point, this is again a conversation we have had repeatedly with those on the Opposition Front Bench. The hon. Member for Ealing North asked about the £830 million and seemed to question it. I am sorry to break it to him, but that has been scorecarded by the Office for Budget Responsibility. It has certified it, costed it and said that it will bring in £830 million over the scorecard period.

My right hon. Friend the Member for Vale of Glamorgan (Alun Cairns) raised important questions regarding alcohol duty. He welcomes the changes in the round, but as the chair of the all-party parliamentary beer group, it is understandable that he is asking whether the draft relief is designed to apply to off-trade pints as well as on-trade pints. I am afraid that it is not, because we want to support consumption of beer in pubs. It is one of many ways not only to support our local pubs, but also to secure opportunities arising out of our exit from the European Union. Only pints in pubs will be subject to this measure, not pints poured into takeaway containers. The industry body the Campaign for Real Ale has lobbied to ask that that could happen. We have looked at the idea carefully, as has the Economic Secretary to the Treasury, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith), but we have serious concerns that it would overcomplicate the draft relief. I hope to reassure my right hon. Friend and CAMRA that takeaway services can continue so long as the beer comes from a full-duty barrel. I am reminded that takeaway off-trade beer accounts for 0.1% of beer sales, but, when the Bill passes its Third Reading today, I am sure that we will all be raising a pint in celebration.

We touched briefly on the electricity generator levy, which is payable only on the portion of revenues that exceeds the long-run average for electricity prices. We have done that carefully to try to ensure that we achieve the Government’s wanted net zero ends while looking after customers. New clause 12 perhaps misunderstands how the EGL operates, so we urge colleagues to reject it. In relation to the energy profits levy, it is important to note that the Government expect it to raise just under £26 billion between 2022 and 2028, helping to fund the vital cost of living support that we have discussed.

In relation to air passenger duty and new clause 10, we have made changes to take advantage again of our post-EU freedoms and to support the United Kingdom. We want friends and family to be able to fly to see each other across the United Kingdom. I am not quite clear whether Labour understands that or is now against helping friends and family across the UK to reunite. I am sure that all will become about as clear as its £28 billion U-turn.

I turn to new clause 5. The right hon. Member for Dundee East (Stewart Hosie) asked why are we making this change on Report. It became apparent that a welcome clarification by the Home Office on how information is obtained for criminal investigations means that some data that is genuinely needed by His Majesty’s Revenue and Customs to check a person’s tax position is deemed as communications data. The clarification aims to secure that into law. We are trying to do it as quickly as possible, which is why it is in the Finance Bill.

The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) raised the duty to report on public health and the poverty effects of the Bill. We already publish data on people in both relative and absolute low-income households each year through the “Households below average income” publication. The Welfare Reform and Work Act 2016 also requires us to publish statistics on the percentage of children in relative and absolute low income, combined low income and material deprivation and persistent low income. I very much hope that she will welcome the £3,300 on average of help that we are securing for families across the United Kingdom in these difficult times.

To conclude—[Interruption.] I thought that the House might be interested in some of the details; apologies for that. The Bill contains a number of important measures that will support the UK economy, people and businesses. I therefore urge the House to reject the proposed non-Government amendments for the reasons that I detailed, and agree to the Government’s amendments and new clauses. In closing, I thank everybody involved for their contributions to our discussions not just today but in the months that have led up to this.

Question put and agreed to.

New clause 4 accordingly read a Second time, and added to the Bill.

New Clause 5

Communications data

‘(1) Section 12(2) of the Investigatory Powers Act 2016 (restriction of powers to obtain communications data) does not apply to a power falling within subsection (2).

(2) A power falls within this subsection if it is conferred (whether before, on or after the passing of this Act) by or under—

(a) any Finance Act of any year (including this Act and any other numbered Finance Act);

(b) the Taxes Acts (within the meaning of TMA 1970);

(c) the customs and excise Acts (within the meaning of CEMA 1979);

(d) any enactment relating to value added tax;

(e) any enactment, not falling within paragraphs (a) to (d), that relates to tax.

(3) But subsection (1) does not apply in relation to the exercise of such a power by a public authority in the course of a criminal investigation by the authority.

(4) In section 12 of the Investigatory Powers Act 2016, after subsection (2) insert—

“(2A) Subsection (2) is subject to section (Communications data)(1) of the Finance (No. 2) Act 2023 (no restriction on tax related powers).”

(5) In Schedule 36 to FA 2008 (information and inspection powers), in paragraph 19, omit sub-paragraphs (4) and (5).

(6) In consequence of the repeal made by subsection (5), omit paragraph 10 of Schedule 2 to the Investigatory Powers Act 2016.

(7) The modification and amendments made by subsections (1) to (6) are to be treated as having always had effect.

(8) Subsections (9) and (10) apply where—

(a) before the day on which this Act is passed, a public authority imposed a requirement on a person under a power falling within subsection (2), and

(b) as a result of section 12(2) of the Investigatory Powers Act 2016 the public authority did not, ignoring this section, have the power to impose it.

(9) The requirement is to be treated as having been imposed on the day on which this Act is passed (and accordingly the period in which it must be complied with is to be treated as starting on that day) unless—

(a) the requirement was withdrawn by the public authority before that day, or

(b) the person complied with the requirement before that day.

(10) Where, before the day on which this Act is passed, the public authority imposed a penalty on the person for contravening the requirement—

(a) the penalty is of no effect, and

(b) if already paid, the authority is liable to repay it.’—(Victoria Atkins.)

This new clause removes a restriction on the exercise of civil information powers (for example, Schedule 36 of the Finance Act 2008 which HMRC use to obtain information from, and about, taxpayers) which otherwise might prevent their use in certain cases (for example, where online banks or other financial institutions are regarded as telecommunications or postal operators).

Brought up, read the First and Second time, and added to the Bill.

New Clause 7

Statement on efforts to support implementation of the Pillar 2 model rules

“(1) The Chancellor of the Exchequer must, within three months of this Act being passed, make a statement to the House of Commons on how actions taken by the UK Government since October 2021 in relation to the implementation of the Pillar 2 model rules relate to the provisions of Part 3 of this Act.

(2) The Chancellor of the Exchequer must provide updates to the statement at intervals after that statement has been made of—

(a) three months;

(b) six months; and

(c) nine months.

(3) The statement, and the updates to it, must include—

(a) details of efforts by the UK Government to encourage more countries to implement the Pillar 2 rules; and

(b) details of any discussions the UK Government has had with other countries about making the rules more effective.”—(James Murray.)

This new clause would require the Chancellor to report every three months for a year on the UK Government’s progress in working with other countries to extend and strengthen the global minimum corporate tax framework for large multinationals.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

Cost of Living Increases

Andrea Leadsom Excerpts

Tuesday 25th April 2023 Commons Chamber

[Dame Andrea Leadsom (South Northamptonshire) (Con)]

I want to speak very briefly to commend the Government for their efforts, not just over the last couple of years, and not just since the appalling aggression of Putin in Ukraine and the post-pandemic crisis, but all the way back to 2010, when a Conservative coalition Government inherited the biggest mess out. When I was doing a bit of research for this afternoon’s debate, I looked back through the years since 1973. Just look at unemployment. Every single Labour Government have left office with unemployment higher than when they came in. When I looked back, I could see that unemployment continued to fall very briefly following the excellent legacy left by a Conservative Government, but then, inexorably, it crept up again. And under Labour, there was no money left when the Conservatives took office in 2010. That is the start of the story. When we look at what really matters to people and at how young people want a role model and want to learn, get out there and get a good job for themselves, we see that unemployment matters so much. In the United Kingdom now, we have the lowest unemployment figures since the early 1970s—in fact, since 1975.

When we look at growth, yes, at the moment we are challenged, as are all economies around the world, but actually, looking at the facts, the UK was growing faster than any economy in the G7 over the last three years, as my right hon. Friend the Member for Wokingham (John Redwood) said. Last year, only the UK had growth of 4%; Germany’s was 1.8%. It is easy for the Opposition to talk about the cost of living crisis and what the Conservative Government have done wrong, but they are not looking at the big picture. They should look at our trade policy. The UK has left the EU, and what are we able to do? We can turn to what is predicted to be the fastest-growing area of the world: Asia. We can expand our global trade and be an advocate for global free trade. There is an opportunity for all nations to rise on the back of more global trade. For so many years, the Opposition tried to scupper the will of the people, as expressed in the Brexit referendum, by preventing us from leaving the EU. Instead, we are now free to form our own trade policy and to trade with the rest of the world, which is fantastic.

The hon. Member for Hampstead and Kilburn (Tulip Siddiq), for whom I have a lot of time, talked about pensions and the difficulties for people in the UK. I wanted to intervene to ask her about the Leader of the Opposition. Bearing in mind that he had legislation to protect his own pension—with no lifetime allowance, can protect his family as much as he likes—will he resile from that? Will he scrap that little statutory instrument, so that he can be in the same boat as the rest of us? Or is it one rule for him and a different rule for the rest of the country? [Interruption.]

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Mr Elmore, you have a fantastic baritone voice. Save it for singing.

Energy Trilemma

Andrea Leadsom Excerpts

Thursday 23rd March 2023 Commons Chamber

[Dame Andrea Leadsom (South Northamptonshire) (Con)]

I beg to move,

That this House has considered the matter of tackling the energy trilemma.

I am grateful to the Backbench Business Committee and to the many colleagues from across the parties who have supported today’s important debate on tackling the energy trilemma. It is perhaps the most critical issue facing us today. Putin’s invasion of Ukraine highlighted the extraordinary pressure on the energy systems of countries right across the world, and also demonstrated the crucial importance of energy sovereignty. For us in the UK, although the risk to security of supply remains low, the Russian invasion has demonstrated as never before the importance of balance in tackling the energy trilemma.

We can think of the energy trilemma as being a bit like a three-legged stool. Its three equally important legs are first, keeping the lights on; secondly, keeping the cost of energy bills down; and thirdly, decarbonising right across the world. If we are to sit comfortably on that stool, all three legs must be in balance, and be given equal consideration. Achieving that balance is by no means easy. As chairman of the 1922 Back-Bench committee on business, energy and industrial strategy, I have, along with my hon. Friend the Member for Stoke-on-Trent Central (Jo Gideon), who is vice-chairman of the committee and is here, the noble Lord Lilley, the vice-chairman of the committee from the other place, and other colleagues from across our two Houses, been looking in detail at the practical steps that need to be taken to meet this enormous challenge.

The Government are, I know, already working hard to tackle the energy trilemma, but while they already have a great deal in hand, a shove here and a push there could make a huge positive difference in very short order to consumers, businesses and our decarbonisation efforts. In our recent report, “Energy Market Reform: Tackling the energy trilemma,” our committee made 34 recommendations. They include unblocking renewables; cutting energy demand; improving the flexibility of energy pricing; looking at the future of the energy price guarantee; and creating a new energy Department in Whitehall. I was very pleased to see that the Prime Minister came to the same conclusion on that last point, and created the new Department for Energy Security and Net Zero. I sincerely hope that we will be as successful with our other 33 recommendations. I am keen to use this debate to make the case for them to Ministers.

There is no doubt that the UK has been a world leader in deploying renewable energy projects, coming from almost a standing start in 2010. By 2020, solar and wind produced nearly 30% of the UK’s electricity—a tenfold increase on 2010. The UK is proud to have almost half the world’s offshore-deployed wind, all created under successive Conservative Governments—a great record of commitment that we can point to. However, renewable energy projects face increasing bottlenecks, including delays in the planning system, delays to grid connections, shortages in supply chains and a creaking electricity market design. In addition, there is an increasing risk of skills shortages as the deployment of offshore wind ramps up this decade. To tackle these problems, the Government should consider a number of measures that should already be in hand.

First, we should speed up the planning system by straight away implementing the new national policy statement for renewables, which has been good to go since 2011, and which would provide much greater investability. In particular, the concern over developers reserving grid connections and allowing years to pass without using them means that vital housing and infrastructure projects cannot go ahead because they cannot get a grid connection.

Secondly, the Government should consider officially committing to the development of an offshore ring main for offshore wind. Some projects are already sharing infrastructure, but clear guidance from Government would speed that up and make it much more acceptable to communities who do not want the huge onshore infrastructure currently being pushed onto their beaches and sensitive onshore conservation areas.

Thirdly, the Government could immediately issue direction on where new power lines should be located. Overhead lines are much cheaper, but less acceptable to communities. Underground lines, on the other hand, are potentially six times more expensive. There is a lack of clarity on policy in this critical area, particularly because independent analysis has concluded that, to meet our 2030 targets for electrifying our energy system, the National Grid will need to build seven times as much infrastructure over just the next seven years as we have achieved in total over the last 32 years—a huge mountain to climb.

Fourthly, although there has been progress on floating offshore wind projects, the Government should take seriously the evidence that floating offshore wind on Britain’s west coast in particular could strengthen our energy security, improving electricity resources in Northern Ireland as well as providing a hedge against low wind speed around other parts of the British Isles.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

The right hon. Lady is making excellent points. She served as Energy Minister, I think, and I am reminded that the best part of 20 years ago one of her predecessors as Energy Minister, Brian Wilson, was promoting the case for an interconnector to go down the west coast of the United Kingdom and through the Irish sea. That did not happen, essentially because of concerns in Ofgem about the danger of stranded assets. I think her idea is a good one, but does she agree that in order to achieve it there will have to be a fundamental rethink about the way we regulate the industry?

[Dame Andrea Leadsom]

The right hon. Gentleman is absolutely right; of course regulation, safety and considering the impact of potential stranded assets are vital. I do not think there should be any fundamental objections to expanding the use of interconnectors, but I am talking specifically here about floating offshore wind, which has huge potential but is not yet being deployed in the UK.

Fifthly, the Government should stop paying offshore wind farms in Scotland to switch off when it is too windy, which is already costing bill payers billions a year. Instead, we should look at piloting local electricity pricing, encouraging producers to work with business and consumers to use more electricity when it is plentiful and to reduce usage or use stored energy when the wind stops. That could be valuable for everyone, from Scottish citizens accessing cheap electricity when the wind is blowing to Cornish residents doing likewise when the sun is shining. Local electricity pricing offers transformational change that would make much better sense of the successful deployment of so many renewables.

One key recommendation made by the 1922 BEIS committee is on how to make these projects more acceptable to local communities. Local referendums and local compensation caused a bit of a stir when we announced them, but the idea has a lot of merit. In short, the report recommends that any proposed onshore wind, solar or shale gas extraction project should be subject to a local referendum on the basis of a simple majority. Where 50% or more of those who vote are in favour, the project can then go to normal planning considerations, but without the prospect of being overturned for lack of local support.

In return for the community accepting that limit on individual objections, our report proposes that local residents should receive free or subsidised energy bills for the entire lifetime of the project. That would have the effect of not only encouraging local communities, but forcing developers to think twice before locating renewables too close to sensitive communities because of the impact on the financial viability of their project. At the same time, bearing in mind the need for an urgent increase in the amount of electricity infrastructure, the committee recommends that the National Grid should be encouraged to build new pylons alongside transport corridors, and that renewables developers should be encouraged to locate alongside them, resulting in cheaper grid connections.

The second area of investigation in our report was how to cut energy demand. Every unit of energy that is not used is one that does not have to be generated. That reduces carbon emissions, cuts the cost of energy to consumers and to businesses, and improves our energy security—a genuine triple win. Ever since the committee’s first report in April 2022, we have been recommending a wide range of energy-saving actions, and I will highlight just a few of them.

First, boiler installers should focus not only on safety, as they do at present, but on efficiency. Every boiler installation should provide only sufficient power to heat that particular home or business, and the temperature gauge should be set at the most efficient level.

Secondly, the completion of the smart meter roll-out should be prioritised and the move to half-hourly pricing brought forward, to put control in the hands of consumers through smart tariffs. They could then choose to wash clothes, cook or charge their car when energy is cheap. Likewise, businesses could plan their energy use around cheaper periods. That could have a big impact on flattening the overall daily peaks in energy demand, with massive benefit for energy security and cost. It would then make sense to regulate for white goods to be smart as standard, to automate the way in which customers take advantage of cheaper price windows.

Thirdly, the report proposes that the Government should bring forward enforcement of the new homes standards and expand the energy company obligation—ECO4—scheme to insulate more cold homes, which would offer far better value for taxpayers than our current policy of subsidising heating for draughty homes. We also recommend that an organisation modelled on Home Energy Scotland should be introduced in England to provide better advice and support to households.

An area in which the committee feels that Government policy has taken a wrong turn is the energy cap itself. It was a well-intentioned policy to stop customers being ripped off by their energy supplier if they did not switch provider often enough, but the current energy crisis has exposed major flaws in the operation of the cap. The cap is below the true cost of supplying energy, so almost all customers are now on capped tariffs in addition to extremely costly additional taxpayer subsidies. That has killed the market for switching between energy suppliers, and has exacerbated the bankruptcy rate of energy suppliers. The report recommends, first, a thorough review of the energy price cap; secondly, that the green levies on energy bills be permanently moved to general taxation to take away some of the regressive nature of levies on energy bills; and thirdly, that a more targeted system for energy bills be introduced. One specific proposal that is worthy of consideration is a cap for basic electricity usage per household, above which households are exposed to the full unsubsidised costs of energy.

Fourthly, our report recommends a new requirement for energy suppliers to offer long-term, fixed-price energy deals so that consumers and businesses have the budgeting certainty that so many achieve through taking out fixed-rate mortgages for their homes or buildings. Fifthly, energy regulator Ofgem must shoulder much of the blame for supplier failures. Financial regulation of energy suppliers has been far too weak. The Government should direct Ofgem to implement banking-style financial stability requirements to avoid a repeat of recent history, whereby an energy supplier can make money when energy costs are below the cap but goes bust if energy costs rise above the cap, leaving all bill payers to pick up the tab.

[Sir Paul Beresford (Mole Valley) (Con)]

There are days when the renewables fail and, when that happens, we have to buy electricity in, particularly from places such as Belgium. Should the Government not be expanding what they have started in looking at nuclear, which my right hon. Friend has not mentioned, and particularly small nuclear reactors? The Government are looking at one type of small nuclear reactor, but there are two. Should we not be encouraging the Government to move into that field, fast?

[Dame Andrea Leadsom]

I am grateful to my hon. Friend for raising the issue of nuclear. I am a huge supporter of both small modular reactors and advanced modular reactors. They offer massive potential for baseload energy here in the UK, which is crucial. While there are not recommendations in this particular Back-Bench committee report, I agree with him.

To conclude, I congratulate the Government on creating the new Department for Energy Security and Net Zero. There is no doubt that having a specific focus on tackling the energy trilemma is vital if we are to meet our goal of leading the world in tackling global climate change while building secure and affordable energy sources at home.

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[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I congratulate the right hon. Member for South Northamptonshire (Dame Andrea Leadsom) on bringing this subject to the House. Her metaphor of the three-legged stool is a very good one. If we can move away from the immediacy of the problems, this debate allows us a few minutes to think about the issue in a more strategic manner. The point about the three-legged stool is that it works as a stool only if it has all three legs. If we take away any one of the three legs—affordability, security or decarbonisation—the other two will not achieve their purpose. The debate is often frustrating and ill served by false, binary choices. The point about a “trilemma” is that the choices that have to be made are about the balance of the progress we make on the three heads of the challenge, as well as the different means by which we seek to achieve them.

For years, to my certain knowledge, the debate has been bedevilled by easy options, and that remains true about some parts of the debate today. I remain to be convinced about nuclear, either in its own right or as a source of baseload, but sceptics like me have to then ask, “Well, where does the baseload come from?” From my point of view, there are enormous opportunities from developments such as tidal energy, which I will come on to as it matters a lot to me and my constituency. There is also the issue of storage and, beyond that, the flattening of the curve through supply-side and demand-side management. Again, it is all about balance. There is no silver bullet here; there is no one technology, area or direction of travel that will solve all our difficulties.

The right hon. Member for South Northamptonshire also spoke about local involvement in planning decisions. There is one other item that I would commend to her in terms of managing these issues: local benefit. Communities that are to have a wind farm, for example, have the opportunity to see some money coming back directly to their community, which makes an enormous difference.

In my own parish, we have a development of five wind turbines that provides a fund, which is administered by the local community council. My student sons have both benefited from that fund in terms of support given to them during their years at university. The support provided by such funds is small but meaningful. If we are to change the way in which we generate energy, from it being produced in large amounts in a small number of places to a much more diffuse pattern of generation, we have to find different ways of doing that.

[Dame Andrea Leadsom]

The Back-Bench committee proposed that individual households living very close to a renewable project should have their energy bills subsidised or free for the duration of that project, so I agree with the right hon. Gentleman but I think it should be even more direct than just a pot, as is so often the case.

[Mr Carmichael]

Absolutely. We make progress on these things incrementally, so if we can get to that situation that would be music to my heart and to the hearts of my constituents.

In Orkney, we already generate more energy from renewables than we can use in our own community. However, as the right hon. Member for Ross, Skye and Lochaber (Ian Blackford) observed earlier, because of the way in which the market is regulated and structured, we actually pay more for it. That is something that generates not just energy, but an enormous amount of resentment in the community as well.

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[Dame Andrea Leadsom]

I would like to reflect what a fantastic debate this has been. I think it is very rare to find the spokesmen for the opposition parties actually agreeing with Conservative Members, and even in some cases suggesting they might like to join our Back-Bench 1922 committee—and they would be most welcome.

I think it is wonderful on such occasions that we see the House break out in agreement. As I said at the start of my remarks, this is perhaps the biggest challenge that faces not just the planet, but definitely the United Kingdom. The hon. Member for Kilmarnock and Loudoun (Alan Brown) said he believes in referendums. Well, I believe in energy sovereignty, and in all sorts of sovereignty for the United Kingdom, so we will have that little frisson of disagreement between us.

Generally speaking, it was wonderful to hear the many and varied views of all right hon. and hon. Members in this place. It demonstrates that, when we do get together and are determined to do something that is right for the world and our own country, we can really make swift progress. I urge the Government to take really seriously some of the submissions made today and to make very urgent progress on them.

Question put and agreed to.

Resolved,

That this House has considered the matter of tackling the energy trilemma.

Oral Answers to Questions

Andrea Leadsom Excerpts

Tuesday 21st March 2023 Commons Chamber

[John Glen]

I do not accept the overall characterisation that the hon. Lady has given. Just in November last year, 428,000 families and 511,000 children benefited from tax-free childcare. The announcements last week will make a significant contribution, and of course that work will start immediately, with the Department for Education consultation. We have a commitment of £204 million for the coming financial year, and £288 million for the following year, to increase supply so that we can deliver this as quickly as possible.

[Dame Andrea Leadsom (South Northamptonshire) (Con)]

I congratulate the Treasury team on the excellent new policy of providing much more childcare support to families. Will my right hon. Friend persuade the Chancellor to meet me and a small group of colleagues to talk about the policy in the round and about how we can give more support to all families, providing more flexibility where informal childcare is provided—for example, by grandparents—and ensuring that families who want to look after their children at home are not, in effect, left out and left in poverty as a result of the decisions they make for their family?

Silicon Valley Bank

Andrea Leadsom Excerpts

Monday 13th March 2023 Commons Chamber

[Andrew Griffith]

I must be very careful not to comment on matters as they relate to the United States. SVB UK was a separate bank. It was regulated here, and it was as a result of that regulation, and the fact that we have taken back control of our financial regulatory rulebook, that we were able to act so decisively. The hon. Lady will forgive me if I do not talk about matters in the United States.

In respect of ringfencing, it was the view of the Bank of England and the Treasury, in the circumstances and to protect public funds, that to provide a permanent exemption for what is a very small part of the much larger HSBC—I think less than 1% of its pro forma clients on an enlarged basis will be former Silicon Valley Bank clients—was appropriate. I do not think it puts inappropriate levels of risk in the system. By streamlining the rulebook, and by bringing back control and dispensing it to UK regulators, with accountability to Parliament—she will know about that through her membership of the Treasury Committee—I think we can have better regulation and deliver better outcomes for the sector.

[Dame Andrea Leadsom (South Northamptonshire) (Con)]

I congratulate my hon. Friend and all who were involved in the rescue. It was vital that we acted urgently to prevent the fear and the risk of contagion that were apparent over the weekend. Does he feel that the fact that SVB UK was a separately ringfenced bank and that ringfencing is a UK-specific regulation brought to bear any protection for SVB UK? He will recall only too well, as I do, that Lehman sucked capital out of the UK when it was in dire straits, which to a large extent caused the ultimate contagion. Will ringfencing continue to protect the UK banking sector as we go forward, even through the Edinburgh reforms?

[Andrew Griffith]

My right hon. Friend speaks with great authority on these matters, and I can give her that assurance. It was constituted as a subsidiary in the UK, it had its own separate balance sheet and it was regulated as such. Because of that fact, the Bank was able to make the decisive intervention it did. There were assets within the subsidiary to which we were ultimately able to restore viability by successfully finding, over the weekend, a very large bank—Europe’s largest bank—to step in and buy, and to put its balance sheet behind, this entity.

Financial Services and Markets Bill

Andrea Leadsom Excerpts

Report stage
Wednesday 7th December 2022 Commons Chamber

[Dame Andrea Leadsom (South Northamptonshire) (Con)]

Will my hon. Friend give way?

[Andrew Griffith]

I was just about to mention my right hon. Friend.

[Dame Andrea Leadsom]

The Minister and I had a very good conversation about this very subject. He is aware that back in the days of a former Treasury Committee and an earlier Government, there was a huge move away from ATMs per se, let alone free access to people’s own cash. Can he therefore make it clear at the Dispatch Box what he said to me, which is that the Government are entirely behind free access to cash and will make that clear in the guidance?

[Andrew Griffith]

My right hon. Friend is just one of many colleagues—many in the Chamber today, but also my hon. Friends the Members for Newton Abbot (Anne Marie Morris) and for Don Valley (Nick Fletcher)—who have made precisely this point. It is the Government’s expectation that the industry-led initiative must deliver. As I will come on to clarify, the powers we are taking in the Bill—we are not mandating them, because we do not support the amendment from the hon. Member for Mitcham and Morden (Siobhain McDonagh)—give us the flexibility in future, by means of a direction statement to the industry, to mandate free cash machines.

--- Later in debate ---

[Siobhain McDonagh]

rose—

[Dame Andrea Leadsom]

rose—

--- Later in debate ---

[Andrew Griffith]

I will try to respond to the hon. Lady’s points further when I sum up, so I can make some progress. We had that debate several times in Committee. We have to be slightly cautious about the unintended consequences of taking into scope a much wider set of transactions that involve an element of deferred payment, but I am sympathetic to her points.

I thank my hon. Friend the Member for Harrow East for raising the topic of a statutory duty of care for consumers. Ensuring that consumers of financial services get the right protection they need remains a priority. The FCA comprehensively analysed the options for improving that, which led to the consumer duty that will come into force in July.

The hon. Member for Bath (Wera Hobhouse) tabled new clauses 34 and 35 to require trustees of occupational pension schemes and fund managers to act in the best interest of beneficiaries, which is indeed the position as it stands today, although I will listen carefully to her points. Trustees and fund managers will be subject to the FCA’s consumer duty, which puts on them a focus of delivering good outcomes for customers.

I turn to amendments relating to frauds and scams. The Bill is a huge step forward in tackling the growing problem of authorised push payment scams. I will be clear that, as I set out in my response to the hon. Member for Hampstead and Kilburn in Committee, the Government are committed to tackling fraud far more widely than in just financial services. She may like to know that the Home Office has now confirmed that a national fraud strategy will be published early in the new year.

Specifically for financial services, UK Finance publishes a half-year fraud update, which sets out how the industry is working together to respond to the fraud threat and to support customers. In relation to the amendments concerning the reimbursement of victims of authorised push payment scams, the payment systems regulator has already signalled its intention to deliver a higher degree of consumer protection.

On sustainable finance, no Government have done more on the climate. We have legislated to reach net zero greenhouse gas emissions by 2050. We support strengthening the UK financial services regulatory regime’s baking in of the climate, as underlined by clause 25, which requires the regulators in discharging their functions to have regard to the need to contribute to achieving compliance with net zero. The regulators will be required to report annually on how they have considered that regulatory principle. That is a significant step in our goal of making the UK a net zero-aligned financial centre, and builds on our green finance and net zero strategies across the whole gamut of regulatory activity. The Government committed to updating our green financial strategy and will announce further information on timing imminently.

[Dame Andrea Leadsom]

I am delighted to hear that from my hon. Friend. Does he agree that that not just gives the UK a competitive edge but creates many new jobs and opportunities for the UK to lead the world in green finance, as well as other green industries in future?

[Andrew Griffith]

Absolutely; it is a strategy that pays back on many levels. It is biased towards left-behind communities and parts of the United Kingdom, it creates jobs and prosperity, it safeguards the prospects of the City of London and our financial and professional services and, of course, it ensures that we deploy capital in pursuit of the transition to a clean, low-carbon world.

Autumn Statement Resolutions

Andrea Leadsom Excerpts

Monday 21st November 2022 Commons Chamber

[John Glen]

My view is that we want to maximise the productive capacity of the labour force that exists in this country. That means doing everything we can to encourage people to take the opportunities that exist across the economy.

[Dame Andrea Leadsom (South Northamptonshire) (Con)]

In my opinion, the real issue in the UK is that there are some unintended hidden cliff edges, particularly for women with children. They want to work, but once they start working for 16 hours, a lot hangs off that, such as free school lunches for one child or free childcare for a two-year-old. If they start working more hours, they are worried that they might start losing all sorts of other benefits and will not be able to afford to work. It is not a question of who thinks people are too lazy, but there is a real question for the Treasury, which I hope will be considered, on how to resolve those unintended cliff edges.

[John Glen]

I thank my right hon. Friend for her observations; she is one of the most respected voices in the House on this subject, and I am happy to meet her to go into some detail on where we are and what she thinks can be done.

I will now turn to infrastructure, innovation and growth.

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[Dame Andrea Leadsom (South Northamptonshire) (Con)]

It is a pleasure to speak in this very important debate at such a critical time for our country. There is no doubt that the headwinds that face us now are akin to, if not worse than, those in 2010 post the financial crisis. The Government should take full credit for a very well-balanced autumn statement; it ensures that those with the broadest shoulders pay the highest price for the cost of getting our economy back on track and, at the same time, that the vulnerable, the elderly and those on the lowest incomes will be able to get through the next few months as we face unprecedentedly high inflation.

I was a junior trader when sterling crashed out of the exchange rate mechanism. I was in my 20s at the time, and it seemed quite exciting to see the collapse of sterling, but within a few months interest rates peaked at 15% and suddenly it was no joke anymore. This takes me back to that time when, as a young person, initially it perhaps seemed like it was all good fun, but very quickly the reality sunk in. For far too many people that will be the case this winter, as they grapple with the rising cost of living and skyrocketing energy bills. Again, I thank the Government for what they have done to try and help.

I want to focus on what we are doing about energy. As some colleagues will know, we have a 1922 Back-Bench committee on business, energy and industrial strategy, made up of Back-Bench MPs. In April we had an inquiry into what the Government could do to help people with their energy bills this winter. Unfortunately, some of those things have been acted on but not by Government. I would like to go through them again because I think they bear repeating.

There are many things that could be done to help households and businesses reduce their energy costs this winter, such as getting energy suppliers on side to advise their customers, whether businesses or households, on some of the proactive ways that people can cut their energy costs. It might sound simplistic, but people should switch off radiators in unused rooms and take appliances off standby. I know for a fact that lots of constituents do not know how to do that, or indeed whether they would save electricity by taking appliances off standby, or whether it is better to leave them. These issues are quite simple to resolve but quite helpful to our constituents.

Reducing the radiator setting on gas boilers to between 55° and 65° would optimise the energy output. When gas boilers are installed, they are routinely set at a higher temperature; reducing that would save up to 10% or 15% on bills without any loss of output. We can reduce the temperature of hot water—we do not have to scald our hands under the hot water tap or when we get in the bath.

Better insulation of homes is just not trusted by enough people. Even people who could afford it and would like to insulate their homes have all seen stories where it went wrong—the insulation slid down inside the cavity walls, it did not work or people got mould. We need to ensure that the accreditation schemes that the Government give to providers are reliable and dependable, and that if things go wrong, people can go somewhere for help.

Vitally, there must be awareness campaigns on energy saving measures and the value of using a smart meter. I was an energy Minister in 2016 when some people were saying that smart meters were there to spy on people in their houses. To this day, some people think, “I don’t really like the idea of a smart meter,” but if they have one, they can sit there and watch the cost of their energy supply. That puts power into the hands of consumers and businesses, and would be a considerable help to them. It would be even better if the Government brought forward the move to half-hourly pricing, which is planned for within the next couple of years. That would enable people to use the dishwasher or washing machine, or to fill their hot water tank, safe in the knowledge that the price of electricity at that moment is much cheaper.

Delinking the price of renewables, and all our energy, from the price of gas has been talked about and is planned, but much more could be done to ensure that we move to that test. Now more than ever, that work should be done. We should also speed up planning for grid expansion. Recently, the National Grid came before our committee and said that there are such delays with whether we want the grid to be undergrounded or overgrounded. Those are vital decisions that have an impact on local people, but resolving them swiftly would empower the grid to speed up connections, particularly for renewables.

Of course, we know that we need to issue new exploration licences for oil and gas in the North sea basin to shore up energy security. At the same time, we must recognise and get the message out that transitioning to net zero as fast as we can requires a period of continued fossil fuel usage until we have sufficient, reliable zero-carbon energy sources. Many people feel that we have to just switch everything off, but that would absolutely fail our country—everything would switch off. We cannot possibly transition away from natural gas for several decades; we have to face up to that fact and inform people of it.

[Jim Shannon]

In my constituency, senior citizens regularly come to me and say that they are turning their whole heating system off, because they see that as a simple way not to spend any money. Does the right hon. Lady agree that the Government need to focus on and assist our elderly population in particular, so that they can do better?

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[Dame Andrea Leadsom]

The hon. Gentleman is exactly right. It is easy to assume, if someone knows how heating systems work, where energy comes from and roughly what the bills will be, that it is all manageable. If the consumer does not have that information, however, and all they see is that bills and energy prices are skyrocketing, the obvious answer is simply to switch the energy off. That is disastrous for many elderly people.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

Does the right hon. Lady not recognise that, within the windfall tax system, there is a rebate for R&D and investment, but only for companies that are investing in fossil fuels? In the autumn statement the Chancellor put a bigger hit on electricity generators, which in Scotland are almost completely renewable electricity generators. Surely we should be pushing all those companies to invest more, so that we get to net zero more quickly.

[Dame Andrea Leadsom]

The hon. Lady is right to raise the issue of how those capital allowances are offset. As I understand it—I will genuinely look into what she says—none of the big oil and gas operators is investing only in fossil fuels. Having talked to many of them over many years, I know that they are all transitioning to net zero. Some of the biggest oil companies are now some of the biggest supporters of offshore wind and solar projects. She makes good point, however, and if she is correct, I would absolutely agree.

We all know that there are so many possibilities for new sources of renewable energy. Let us not get hung up on fossil fuels versus renewables. There are so many renewable sources and zero-carbon sources, including offshore wind and Hinkley Point C zero-carbon energy, and small modular reactors are being created and prototyped here in the UK. There are so many possibilities, including with deep geothermal, coalmine water and heat networks in new housing developments. There are so many opportunities that I wish the Government were faster to look into.

The Government should certainly make the case much more strongly for the continued use of natural gas. Even the Climate Change Committee acknowledges that to generate sufficient electricity for the transition will require the use of gas until an adequate baseload capacity from reliable low-carbon sources is reached. From hydrogen to wave power, and from geothermal energy to nuclear fusion, there are so many energy sources that can tackle the energy trilemma: the triple whammy of trying to keep the lights on, keep bills down and decarbonise.

The Government have done a great job with the autumn statement—the balance was right—but where energy is concerned there is so much more to be done to provide nuance on how people can help themselves and how we can move much faster down the road to transition in a way that will be a net gain for us all and that addresses the energy trilemma.

Autumn Statement

Andrea Leadsom Excerpts

Thursday 17th November 2022 Commons Chamber

[Jeremy Hunt]

I have enormous respect for the right hon. Lady, but I do not think that those comments really did her justice. These were £11 billion of spending increases for the NHS and schools, which will make an enormous difference to schools and hospitals in her constituency, as they will in mine. On many of her points, I have some agreement with what she said, and we have actually moved in her direction—on wealth taxes, for example. This is, I think, the biggest ever fall in the capital gains tax allowance. It is a very big change. With respect to high earners, we have had a big tax increase for anyone on the 45p rate—£1,000 a year for anyone on over £150,000—and we are publishing distributional analysis that shows the impact of all these decisions, which shows that the biggest gainers are people on low incomes.

[Dame Andrea Leadsom (South Northamptonshire) (Con)]

I congratulate my right hon. Friend on walking a tightrope very carefully. I think he has made a positive financial statement, but I ask him to look at energy in particular from the perspective of every family. Individual families need to reduce their own energy bills and energy usage. There is so much that can be done. I commend to him the 1922 Committee’s work looking at how individuals can do things such as putting a timer on their Economy 7 boiler and reducing the temperature of their hot water. There are things that families could do for themselves, and the Chancellor could of course require energy suppliers to do much more by going house to house to help people who are really struggling this winter.

[Jeremy Hunt]

As ever, my right hon. Friend speaks very wisely. Today’s statement was long, and I did not have time to go into the details, but my right hon. Friend the Business Secretary will announce a plan very much along the lines that she describes. It is a kind of new contract with families up and down the country. We are giving £106 billion of support to bring down energy bills this year and next. We are helping people, but we are also saying, “We need you to also do things to help improve energy efficiency.” That is why the national plan to reduce energy efficiency by 15% is so important. We are asking people to help themselves by taking the kind of measures that she mentions, so that when we are not able to offer sustained support people’s energy bills are lower.

Economic Situation

Andrea Leadsom Excerpts

Wednesday 12th October 2022 Commons Chamber

[Chris Philp]

The Scottish Government are of course receiving record levels of funding, and that will continue. The hon. Member asked about excess deaths. Well, I think the drug death record of the nationalist Government is, frankly, pretty terrible. She asked about the uprating to welfare. There is a statutory process that happens every year—every autumn—and that decision has not been taken. It will happen in the normal way, as it has been done for every year.

The hon. Member referenced the IMF’s growth forecast for next year. I have already pointed out that last year we had the highest growth in the G7 and this year we have the highest growth in the G7. If we take the three years together—last year, this year and next year—we will find that the UK, at 11.7% over those three years, still has the highest growth of any G7 country.

The hon. Member asked about institutions. The Chancellor and the Prime Minister have the highest regard for the OBR and the Bank of England. They are meeting both of those institutions regularly. She referenced the growth plan. Having a competitive tax system, supply-side reforms to unleash the productive potential of our economy and making our energy market function properly once again are essential prerequisites for growth, and I am proud that it is this Government who are promoting them.

[Dame Andrea Leadsom (South Northamptonshire) (Con)]

I am disappointed at the shadow Chancellor, who is a very good economist. She is accusing the Government of causing problems for people’s mortgage rates, but my right hon. Friend will agree with me, I am sure, that one of the worst things that can hit any economy is a wage-price spiral as a result of huge inflation. Can he confirm to the House that the action the Government have taken to provide support to the economy and to provide this huge input in relation to energy prices will bring down headline inflation, and specifically make mortgage rates better than they would have been otherwise, which is totally the opposite of what the shadow Chancellor is saying?

[Chris Philp]

My right hon. Friend, who of course has a very distinguished professional track record in financial services, is absolutely right. A range of independent forecasters have confirmed that the energy price guarantee will not only protect our constituents from high prices, but lower inflation by about 5% compared with where it would otherwise have been—a vital intervention. While we are on the subject of inflation, it is worth keeping in mind that inflation in many countries in continental Europe is considerably higher than it is in the United Kingdom. For example, in Germany it is 10.9% and in Holland it is 14%.