EV Strategy: (ECC Committee Report)

Earl of Leicester Excerpts

Wednesday 16th October 2024 Lords Chamber

[The Earl of Leicester (Con)]

My Lords, my noble friend Lord Lucas referred to various members of the committee, which was excellently chaired by the noble Baroness, Lady Parminter. Indeed, my noble friend Lord Lilley referred to himself as the grit in the oyster that makes the pearl—not to worry, because he was replaced by my noble friend Lord Frost. I was mildly hurt that he did not mention me, but I am certainly not of the sort of magnitude of those two honourable Peers—maybe the grit in the cockle. I have just joined the Environment and Climate Change Committee for the methane inquiry, so I was not present for the EV inquiry, but it is something that particularly interests me. Then, when I was just nipping out to spend a penny, I saw all the clerks, past and present—some of them have left, thankfully. It was somewhat intimidating that they, of course, had been involved in this inquiry.

I declare my registered interests as a landowner and farmer in Norfolk, where I have invested in every single form of renewable energy under the sun except for wind. We run EVs in our business, including mine. Before I had an electric vehicle, I had no idea of their phenomenal acceleration.

I welcome the general direction of progress towards full decarbonisation, but I remain sceptical about the Government’s net zero by 2050 policy. I want to talk about this aim to accelerate grid decarbonisation and what that will do to electricity prices and, therefore, the cost of charging an EV. Indeed, I fear the pressure applied on the United Kingdom’s economy through this drive to achieve net zero in such a short timeframe will have significant detrimental consequences across multiple facets of our economy while much larger and more polluting countries merely pay service to net zero.

This Government’s aim is to decarbonise the entire electricity grid by 2030—five years ahead of the target set by the Conservatives and just six years on from Labour taking office. The Secretary of State, the right honourable Ed Miliband, says he will do this by eliminating natural gas—currently the largest source of UK electricity—and expanding wind and solar power. Nuclear power is also carbon free, but no new reactors are expected to come online until 2031, so his plan relies entirely on renewables and, as we know from bitter experience, reliance on renewables means sky-high energy prices.

In the 1990s, renewables accounted for 2% of Britain’s electricity. In 2022, a couple of years ago—a record year for renewables—they produced only a third of Britain’s electricity. Electricity prices have more than doubled in the past 30 years, leaving the UK with some of the highest in the developed world. The shutdown of Ratcliffe-on-Soar a fortnight ago represented the closure of Britain’s last coal-fired station. In this symbolic moment, I invite the House to reflect on the speed at which such changes are occurring and whether we should make such performative closures at a time when we are so far from the destination of net zero.

My view is that our national energy policy should consist of a huge mix of energy sources with, yes, a healthy and increasing blend of multiple renewable options. The Secretary of State’s plans to continue the growth of the Great British Nuclear project are particularly welcomed, as nuclear power should be a key tool for reaching emissions targets. Additionally, we should not neglect other energy sources that can help soften the blow on the economy while our country transitions towards its decarbonising targets. Many colleagues across both Houses would not be opposed to a few cheaper alternatives involving oil, gas and, yes, one or two coal-fired power stations. This would benefit those who face a difficult winter ahead, those whose plight has been exacerbated by the Government’s decision to scrap the winter fuel payment policy, and those 40% of EV users who have to pay 20% VAT on the electricity to charge their car.

In a recent BBC report, the leader of the GMB union claimed that Labour’s green policies are costing jobs and hollowing out working-class communities. This came after plans were announced to shut down the Port Talbot coal-fuelled furnace, thus making 2,500 of the 4,000 workers at the last steelmaking plant redundant. The Government’s plans to decarbonise through deindustrialisation will be very costly to workers across the country working in similar industries with a heavy demand for power.

Another core element of the Government’s net-zero objectives is the subject of this debate: the transition from internal combustion engine cars—I will refer to them as ICE—to electric ones, despite issues surrounding affordability, end-of-life management and charging accessibility. I must stress that I welcome the transition towards electric passenger vehicles. I have one, and I love it, but its capital cost is not cheap, and it was purchased on a company scheme—as we have heard from a number of Peers—that is heavily subsidised. Indeed, without significant progress in this sector, we will lag behind our international counterparts and not fulfil our expectations of reducing carbon emissions.

The noble Lord, Lord Woodley, who is not in his place, mentioned manufacturing. The only EVs manufactured in the UK are the Aston Martin Rapide in Wales, the Nissan Qashqai and a series of vans made by Stellantis on behalf of Vauxhall and Opel—the Combo—Peugeot, Citroen and Fiat, which makes the Doblò. From 2026, we will have new Nissans—Juke, Leaf and Qashqai—and a new Jaguar Land Rover factory in Merseyside, but the Mini EV that was made in Oxfordshire has now moved to Leipzig and China, Ford is in Cologne and GM is in North America.

It is also my view that the Government’s plans to ramp up penalties and restrictions on ICE cars are an alarming sign for the UK economy. As the EV strategy report by the Environment and Climate Change Committee indicates, the UK EV market remains concentrated around high-value cars and SUVs. It proceeds to stress the importance of providing affordable options for consumers, most of whom are currently priced out of making the leap to electric cars. I fear the Government have not understood the economic magnitude of such a purchase for the average consumer in the UK.

The end-of-life management of EVs is a similarly relevant issue. The EV strategy report claims that with an increased number of EVs expected in circulation, more must be done by the Government to display the process of waste management and recycling of EV batteries.

Along with agriculture, transport accounts for the largest proportion of emissions in the country. We are discussing EVs—cars and light vans—but there is no way in the foreseeable future that HGVs will be electric-powered. For cost and practical reasons, it is not possible for HGVs, which are essential to our economic output and are designed to cover long distances within a deadline, to be battery-powered. Indeed, I read somewhere that one-third of the weight of a big HGV would be the weight of the batteries, so they would become even more inefficient. If one considers that 56% of What Car? readers surveyed cited the lack of charge points as the reason preventing them going electric, simply imagine the costs that running electric HGVs would have for business and the economy.

We heard about charging. I am lucky; I am able to charge at home and drive down to London, on the occasions when I do not take the train, and then I can charge at my block of flats, so I have not used a public charge point for probably three months. I have had my car for four years. I thought the battery life would deteriorate. In fact, it is still going strong after 40,000 miles.

There was talk about range anxiety. I personally quite enjoy the frisson of dropping down. In fact, my record is getting down to minus three miles. It was 10 pm. My wife was not amused, particularly when the internal lights and the music went off, but I was able to get to the top of a hill, cruise down and regenerate enough electricity to get home.

That was not repeated when I was driving to Plymouth in the winter, because I could, in my EV. I knew I was going to have to fill up with electricity twice. On the second occasion, I was six miles from Exeter Moto services—and in a very useful attendance at the APPG for EVs I had heard the chief executive from Moto say that it had doubled the number of charging stations there from 28 to 60 or so—so I thought, great, I am going to be fine. Interestingly, he said that when all 60 charging points are being utilised, that was equivalent to half the power requirements for the whole of the city of Exeter, which was quite a statistic.

Anyway, I had six miles’ range and, of course, my car stopped one mile away from the services. The recovery vehicle came remarkably quickly and had to do lots of different things as there is no neutral in an electric car. He took me the one mile to the service station and I asked him how many other EVs he was doing this for. He said a lot of his call-outs were to collect people like me who take a rather relaxed view of range anxiety. It is for that reason, too, that I have retained my big diesel SUV, which has a 600-mile range and if I am driving across the continent or up to Scotland, that is what I will take, with four children and maybe towing a caravan or something.

Finally, I want to say that I resent the scaremongering tactics of politicians and lobbyists on the matter of net zero. Trying to exact change through inciting fear among consumers and the electorate is no way to govern. I invite the Government to reconsider their methods for imposing this set of policies on the public. There will no doubt be notable economic repercussions if these policies are forced through in such a constrained way. We must remember that even the Climate Change Committee has said that by the time we reach net zero in 2050, we will still derive 25% of our energy from hydrocarbons. This is why it is called “net” zero and I think a lot of people rather forget the net bit.

Strikes (Minimum Service Levels) Bill

Earl of Leicester Excerpts

2nd reading
Tuesday 21st February 2023 Lords Chamber

[The Earl of Leicester (Con)]

My Lords, I had hoped to follow the noble Lord, Lord Berkeley, but unfortunately his name was scratched from the list.

Why are the Government introducing this Bill? First, and most obviously, it was in my party’s 2019 election manifesto. Secondly, it is to ensure minimum service levels in key public sector areas of employment, to try to ensure that any clear danger to human life is averted, as far as it can be, by ensuring a basic service during strike action. Thirdly, they have been forced into this action now by the sheer level of strikes that occurred last year and continue to be planned for this year, which are adversely affecting the national economy and many people throughout the country, including working parents.

As my noble friend the Minister stated in his opening remarks, in December alone, 843,000 working days were lost due to labour disputes, the highest since November 2011. By comparison, the monthly average in 2019 was only 19,500 days. The Centre for Economics and Business Research forecast the direct cost of all these strikes and the indirect cost of worker absences due to rail strikes to be at least £1.7 billion over the eight-month period to January, or 0.1% of expected GDP over this period.

Cebr also states that unresolved industrial disputes are having an adverse impact on growth at a time when many forecasters expect—and in some cases, it would seem, want—the economy to be in recession. There is a clear and urgent need for this legislation. Recent strikes have demonstrated the disproportionate impact strikes can have on the public and have cost the economy at least £6 billion.

It is not only the effect of teachers going on strike without being required to inform the headteacher of whether they would be striking so that the head can plan for the care of the children coming into school, but the knock-on effect for two-parent working couples, as one has to elect to stay, often at a moment’s notice, to look after their children. The place of work that parent was due to be at then has its own employment issues and challenges to deal with. As for single-parent families, I need say no more.

On the face of it, some public sector pay is low. For example, basic pay for a newly qualified nurse would be £27,000 a year. With overtime, unsocial hours and London weighting, this could increase to £31,000, but the Government Actuary’s Department states that their total package amounts to £50,000. About a third of this is in their defined salary pension scheme, with the rest in other benefits. Given the choice, I am sure many public sector workers might like to take an enhanced salary with a commensurate reduction in their pension—but they are not being given that choice.

A close member of my family is a very committed nurse, having been in the NHS all her life. She has voted for strike action for the first time. When I asked her what her salary was, she was able to tell me. That was not the case when I asked what her total package or her pension was worth, or what percentage contribution her employer paid. For every £1 a nurse puts into his or her pension, a further £3 to £6 in benefits accrues from the employer, with a total pension contribution of 20.6%. Furthermore, their pension scheme allows them to activate it from the age of 55, allowing for a phased retirement.

I must make it clear that I do not begrudge nurses these benefits, because we all know that they work under great pressure, often in appalling conditions and, sadly, in some cases, with little leadership shown by their bosses. It is true that since 2010 they have seen their actual pay—that £27,000 or £31,000—fall in real terms. But if the cake was cut in a different way, as I have alluded to earlier, I am sure that many public sector workers would not be striking for these unattainable pay awards, which Labour itself has said are not sustainable. Increasing all public sector pay by 11% would cost £28 billion, equivalent to an extra £1,000 for every UK household, because of all the on-costs of the pension packages. The average wage for a teacher in 2021 was £42,000, but they were also benefiting from an employer pension contribution of nearly 24%. In my county, Norfolk County Council’s employer contribution was a staggering 37%.

While in recent years—it was not always thus—some private sector pay has been outstripping public sector pay, government regulations stipulate that a private sector employee must pay a 5% contribution to a defined contribution scheme, not a public sector defined salary pension scheme, and their employer must pay the balance of 3% to take it up to 8%. Some employers share the burden equally, with a 4% contribution. So, you can see a huge disparity in pension benefits that rarely gets aired in public debate. Any large pay awards north of the independent NHS Pay Review Body recommendations will, of course, make these already generous pensions even more unaffordable, as well as making the total package very attractive. Indeed, pension contributions being paid in by today’s workers and their employers are being paid straight out to already retired public sector workers.

I cannot see my arguments turning government policy around; we are where we are. Hence, I lend my support to the Government and to the Bill. In these circumstances, when so many days of work are being lost, with crises such as the Ukrainian war and the massive mountain of debt that has been built up by the country’s handling of Covid, we really must insist on minimum service levels being maintained and legislated for. That is why I support the Bill.