Fiscal Outlook

Lord Redwood Excerpts

Thursday 10th September 2026 Lords Chamber

[Lord Redwood (Con)]

My Lords, the Conservative Government were swept from power, first because they did not deliver on immigration control in the way that they promised but, secondly, because they presided over a very major surge in inflation in the early 2020s, which had been brought about by excessive spending, excessive borrowing, the deliberate repression of interest rates and the artificial creation of very large sums of money by the Bank of England. Like many, I supported the first very substantial injections into the economy when lockdown was first announced. Lockdown took a lot of activity and income out of the economy and a very major offset was needed. However, I became increasingly critical and impatient in the recovery period because the Government and the Bank of England did not seem to understand that we were into recovery and carried on with excessive borrowing, excessive spending and excessive money creation. I and others told them that it was bound to be inflationary, but much of the great British economic establishment was slow to see that and the result was a nasty cost of living crunch that did damage to the electorate and drove the Conservatives from power in a perfectly understandable way.

By 2024, however, the Conservative Government had got much better control of the economy and, for the first six months of 2024, under Conservative direction, the inflation rate came back down to the 2% target. For those six months, it was the fastest-growing economy of the G7. The Government set out a five-year plan in their 2024 Spring Budget, as always, which had entirely credible figures to show the deficit and therefore the borrowings coming down year by year to reassure bond markets. Under the Conservatives, of course, it was considerably cheaper than it is today for the Government to borrow because there was a bit more credibility in the medium-term prospects for controlling borrowing than there is today.

I think the fairest thing to do to try and analyse where we are, because I want the Government to succeed and I think they need to consider very carefully where they are when framing their next Budget, is to compare the plans of the outgoing Conservative Government in the 2024 Budget for 2027-28 with those of this Government. Let us concentrate on 2027-28 because that is when the new Prime Minister and his new Chancellor can make any changes they like. They have inherited the current year and have chosen not to make many changes, just a few incidental, very small increases in spending. They have basically lived with the Reeves/Starmer construction of this year, but let us hope they think carefully about what they want to do for 2027-28.

What have they inherited from Reeves and Starmer? Well, in two Budgets, Reeves and Starmer increased taxes by £66 billion by policy changes—there is also, of course, a much bigger increase in taxes from fiscal drag and inflation—and for 2027-28 they suggested that they wanted to borrow £97 billion more than the outgoing Conservative Government had planned to do. The Conservatives were planning to borrow £50 billion in 2027-28, and the current Government inherits £147 billion. There is then the level of spending: the Reeves/Starmer Government added £145 billion extra spending for 2027-28 compared with the £97 billion that the Conservatives were planning for that year. The total package is to borrow a lot more, tax a lot more and spend a great deal more.

Looking at the economic performance of the last two years, we see that this has not been a benign policy mixture for the economy. Unemployment has gone up and inflation has gone up, not entirely because of world events in the Middle East, but also driven by public sector costs where there has been a very big increase in public sector wages. I have no problem with paying people in the public sector more, but there should be productivity gains to help pay for it, and those have been sadly lacking. We have seen the Government stumbling to maintain tax revenues at the more elevated levels because they have triggered what in the 1970s was called a brain drain. A lot of talented people and a lot of people with wealth have decided that they want to make their lives or to make their investments elsewhere, which is a considerable concern. I have no problem with wanting to tax the rich more than everybody else, because they have the money to tax, but if you overdo it they do not stay to pay the money you wish to raise from them and then everybody else has to pay rather more, because you have lost those easier amounts you can get if you tax the rich in a sensible and internationally competitive way.

As has been made very clear by my noble friend Lord Bridges, the Government have to take action on spending. I do not think higher taxation is going to help get the Government out of this, given that they have ruled out the main taxes on most people. They would have to target the wealthy, the energetic, the people who work harder rather more than anybody else. More of that would do damage to growth and would mean less revenue rather than more, so they have to find public expenditure reductions that can start to bring the budget into a proper shape.

I do not share the view of those who think we should pick on the pensioners or the disabled to make particular sacrifices at this juncture. Those who are genuinely disabled need our proper financial support and I think both parties were right to promise the triple lock in the election and should keep to their word. There are many easier targets, which I have often mentioned, but which time does not permit me to handle today, but my party has set out a very good set of cuts for the benefits bill to start us off.

Public/Private Partnerships

Lord Redwood Excerpts

Monday 7th September 2026 Lords Chamber

[Lord Wilson of Sedgefield (Lab)]

We committed to getting Britain investing again to support our wider economy. In April, we launched targeted support with a new regulatory regime to improve access to financial guidance, moved the long-term asset fund into the stocks and shares ISA and welcomed the industry-led Invest for the Future campaign and risk warnings review to promote the benefits of investing to the public. The Invest for the Future awareness campaign has pointed out that more and more people are willing to invest their money rather than keeping it in cash ISAs. I confirm to my noble friend that the Chancellor of the Exchequer announced this morning that regional mayors will be involved as strategic partners in the delivery of the National Wealth Fund.

[Lord Redwood (Con)]

My Lords, will the Government speed up the identification of suitable projects and the granting of the necessary permissions? There is plenty of private capital that could help the Government. Will they make sure that enough risk is transferred to protect taxpayers’ interests?

[Lord Wilson of Sedgefield (Lab)]

The noble Lord makes some very good points. I do not know whether the noble Lord heard the Chancellor’s speech earlier today, but that is one of the things he wants to do: he wants to break down all the regulation, look at ways of investing more money into infrastructure, et cetera, and make sure that investment is there from the private sector. The National Wealth Fund has £27.8 billion in it, but we want to ensure that it releases £100 billion of investment over five years.

Preparing for an Ageing Society (Economic Affairs Committee Report)

Lord Redwood Excerpts

Friday 4th September 2026 Lords Chamber

[Lord Redwood (Con)]

My Lords, I was happy to support previous Conservative Governments in implementing the triple lock, and I support the current Government in honouring their promise. This has been a useful policy in reducing pensioner poverty.

As one of the Members of this House probably keenest to control public spending, I am very conscious of cost, and I have regularly recommended that we should raise the state retirement age, which gives you a substantial reduction and is a fair way of achieving the savings. It is also very much in the spirit of this report, which I welcome; namely, that people in their 60s, unless there is disability or a serious health problem, should be encouraged to work, and they will probably have richer lives as a result. This is now possible because life expectancy is greater than when the lower state retirement pension ages were first set.

More importantly, there are now very few people who do hard manual work. Clearly, they needed a much lower retirement age because they could not continue. Now people have hydraulics, automation and robotics, so it is much more feasible to carry on working for longer. Really, the most power or muscle pressure you now need is the ability for your fingers to press a touchscreen; you are then able to do most of the interesting jobs in our community.

Those who wish to abolish the triple lock or make other changes to pension arrangements would be well advised to remind themselves that the pension is not a welfare benefit but an entitlement based on contributions to the national insurance scheme. Of course, that can all be changed, but it would require complex legislation and a lot of political argument. No Government to this day have been willing to attempt that, I suspect because it would be very unpopular with the public.

The contributory principle is, to me, fundamental. It shows that people have to work and have to pay national insurance. There is an annual sign-off of the fund, with a review. It is a pay-as-you-go fund, not an endowment fund. It embodies a very important contract between generations: the working generation say that they will pay for their parents’ generation on the basis that their children, when they are working, will then pay for them. I do not want to disturb that social contract between generations; I want to keep the contributory principle—you get something for something—and I do not want to take away the triple lock. That would be a great pity.

Windsor Framework (Retail Movement Scheme: Plant Health) (Amendment) Regulations 2026

Lord Redwood Excerpts

Wednesday 2nd September 2026 Lords Chamber

[Lord Redwood (Con)]

We need to renegotiate the Windsor Framework agreement, which is totally unacceptable. This Parliament needs to govern, and establish the laws for, Northern Ireland, and we need to integrate our internal market across from the mainland of Great Britain to Northern Ireland itself. There is every opportunity in the reset, because we read in the press that the Government have already made massive and unreasonable concessions to the EU, which seems to be getting every item on its wish list. We are giving away billions of pounds of fish for no good purpose. We are substituting our rather good Turing student scheme for a much dearer one which helps the EU more and our students less. We are probably going to concede on mobility of labour for people under 30, so that they will have much more benefit, with many more of them coming to us to take advantage of our jobs, markets and facilities. We are probably going to extend EU lawmaking rights over many more areas.

The Government will undoubtedly end up paying the EU a lot more money, so, Government, wake up—the EU is taking you for fools. It needs to be the case that Britain demands other things. We could certainly put in a much better system to free the borders between Great Britain and Northern Ireland without putting new barriers on the border to the Republic of Ireland, under the mutual enforcement system that I and others have promoted in the past to previous Governments. We can certainly do much more to reduce the costs of Europe by going through, in the negotiations, how the residual financial liabilities are too excessive. Above all, we should reinstate the unity of the United Kingdom by regaining the right to make the laws, in this Parliament and in Northern Ireland, that apply to the people of Northern Ireland, and to reinstate our internal market throughout the whole UK.

Civil Service Pension Scheme

Lord Redwood Excerpts

Tuesday 30th June 2026 Lords Chamber

[Lord Redwood (Con)]

My Lords, will the Government be asking the contractor for compensation for their costs and inconveniences, as well as the contribution it should be making to those who have lost on their pension?

[Baroness Anderson of Stoke-on-Trent (Lab)]

My Lords, the noble Lord is absolutely right. We have already done so, and Capita confirmed in writing in April that it will meet the costs that we have laid out.

Social Media: Use of X by Government Departments

Lord Redwood Excerpts

Tuesday 23rd June 2026 Lords Chamber

[Baroness Anderson of Stoke-on-Trent (Lab)]

The noble Lord has been campaigning on this issue for many years, including before he entered your Lordships’ House. A level of pragmatism needs to be adopted. We need to talk to the electorate and to our citizens where they are, and not necessarily on which platforms we wish they were on. When 19.2 million British citizens use X, it is an important place, which I guess is why the leader of the Liberal Democrats, Ed Davey, is still on X.

[Lord Redwood (Con)]

Does anyone in government have the job of reading all the incoming messages, following the Government’s submission, and do they ever take any of them seriously?

[Baroness Anderson of Stoke-on-Trent (Lab)]

My Lords, on a personal level I tend to look at X as little as possible, which is why I was a little out of the loop yesterday given all the news that was breaking on X. But, having said that, there is a genuine thing here about how we communicate with people. There is a reason why we use these tools. In fact, given the extreme heat that we are currently experiencing, both the Met Office and UKHSA are using X, among other platforms, for engagement. It is making sure that it is about engagement and not just one-way, although on a personal level, when I was an MP, I found Meta platforms much easier to engage with the electorate on.

Steel Industry (Nationalisation) Bill

Lord Redwood Excerpts

2nd reading
Tuesday 16th June 2026 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Leong) (Lab)]

My Lords, steel is a historic British industry at the heart of our national story. For generations, steelworkers have forged not only steel but Britain’s prosperity. From Scunthorpe to Sheffield, from Port Talbot to Teesside, steel communities have powered our industrial success, strengthened our economy and contributed immeasurably to our national life. For those communities, steel is far more than an industry; it is a source of pride, identity and opportunity. It is a way of life, built over generations through skill, dedication and enterprise.

However, steel is not only about our past; it is fundamental to our future. Steel underpins our infra- structure, manufacturing base, energy networks and transport system. It is essential to the homes, railways and power stations that we build and the defence capabilities on which our national security depends. Steel is therefore not merely another sector of the economy; it is a strategic national asset. Its future is central to our economic resilience, our industrial strength and our ability to deliver the growth and prosperity that this country needs.

The global steel industry faces profound challenges. The volatile geopolitical climate, intensifying international competition and significant global overcapacity have placed enormous pressure on steel producers worldwide. British producers face those challenges while contending with energy costs that remain higher than those of most of their many international competitors. Recent events have highlighted the fragility of global supply chains. The pandemic exposed vulnerabilities that many had assumed did not exist. Russia’s invasion of Ukraine reminded us that economic and national security are inseparable. Increasing geopolitical uncertainty has underscored the importance of maintaining domestic industrial capability.

The lesson is clear: a modern industrial nation cannot afford to lose the capability to produce the materials on which its economy and security depend. Without intervention, the United Kingdom faces the prospect of being the only G7 nation unable to produce virgin steel from raw materials within its borders. That would be more than an industrial failure; it would represent a strategic vulnerability. That is why in March the Government published The UK Steel Strategy, setting out a commitment to revitalise the steel sector, restore domestic production to sustainable levels and secure the industry’s long-term future.

The strategy recognises that the Government have a vital role to play. It means tackling the drivers of high operating costs, including reducing industrial energy costs. It means maintaining a robust trade defence regime to protect British producers from unfair competition. It means working alongside industry to secure the investment that is needed to modernise and decarbonise steel production. It means ensuring that where strategically important steel-making assets are at risk, government has the tools necessary to act decisively in the national interest.

That brings me to the Bill before the House today. This Bill establishes a framework that enables the Government, where necessary and justified by the public interest, to bring steel undertakings into public ownership. This is an enabling measure. It provides the Government with the ability to intervene where strategic domestic steel-making capability is at risk and where such intervention is necessary to safeguard the national interest. As the Prime Minister has already made clear, the Government are strongly minded to use these powers in relation to British Steel, subject, of course, to the public interest test set out in the legislation.

The circumstances surrounding British Steel and the Scunthorpe steelworks are well-known to the House. Scunthorpe is the last remaining primary steel-making capability in the United Kingdom. It directly employs approximately 2,700 highly skilled workers and supports many thousands of additional jobs throughout the wider supply chain. The Government took decisive action last year under the Steel Industry (Special Measures) Act 2025 to prevent the premature and disorderly closure of the blast furnaces at Scunthorpe. I would like to place on record my gratitude to noble Lords across the House for their constructive and responsible engagement with that legislation. I pay tribute to the parliamentary staff whose efforts enabled Parliament to respond swiftly to an urgent national challenge.

The measures enacted last year served their immediate purpose. They prevented closure and ensured continued production. However, those powers were always intended to be temporary. Although they have enabled continued operation, they do not provide the flexibility required to undertake the longer-term restructuring, investment and modernisation that the business now requires. As matters stand, the Government believe that public ownership offers the most effective way to secure the company’s future and to enable strategic decisions to be taken in the long-term interests of the business, its workforce and the nation.

However, I emphasise that any decision to nationalise remains subject to the public interest test as set out in the Bill. The Government did not reach this position lightly. We engaged constructively and extensively with Jingye to pursue a commercial solution. Our clear preference was to secure the future of steel-making through agreement rather than through intervention. However, despite extensive negotiations, it has proved impossible to reach an agreement that would represent a responsible and proportionate use of taxpayers’ money. In those circumstances, the Government concluded that legislation was necessary.

Some noble Lords may reasonably ask whether nationalisation is the right answer. The Government’s response is straightforward. Nationalisation is not an ideological aim and it is not the first option either. It is a pragmatic tool available for use when the national interest requires it. The costs of losing our steel-making capability would far outweigh the costs of preserving it. Once blast furnaces are extinguished, once supply chains disperse and once specialist skills are lost, rebuilding those capabilities becomes extraordinarily difficult and expensive. Inaction carries consequences and dependency carries risks. The loss of sovereign industrial capability carries costs that cannot be easily measured in purely financial terms. That is why Governments around the world intervene to protect strategically important industries. Britain should be no different.

We believe that British Steel can succeed. With the right leadership, investment and long-term strategy, the company can be transformed. We have already seen the success of public ownership in the case of Sheffield Forgemasters. Recently, British Steel has secured important new contracts, including supplying rail infrastructure and supporting future energy projects. These are encouraging signs of the opportunities ahead.

Turning to the detail of the Bill, I recognise that it contains significant powers and that noble Lords will wish to scrutinise them closely. That scrutiny is both expected and welcome. The Government have consistently sought to ensure that the powers contained in the Bill are proportionate, necessary and appropriately constrained.

[Lord Redwood (Con)]

On a point of information—

[Lord Fox (LD)]

We do not do points of information at Second Reading.

--- Later in debate ---

[Lord Redwood (Con)]

My Lords, I congratulate the Minister on his appointment. I am also very grateful to the Minister for his honest account of this legislation, where he made it very clear that it is very likely that the strong powers in this legislation will be used sometime soon fully to nationalise the Scunthorpe works. That, I think, makes it even more curious that the Government he represents have given us an impact assessment with no numbers in it at all, no account of what a nationalisation of the Scunthorpe works would look like, what impact it would have on the public budgets, what impact, as my noble friend Lord Hunt said, it would have on the £2.5 billion allocated for steel as a whole, and no account of how it would be a transfer of money we thought had been allocated for capital investment and modernisation in creating something new to the purpose of paying losses on a very old plant whose future is very uncertain. During this debate and over the course of this Bill, I hope we can get some numbers from the Government.

When the emergency legislation went through a year ago, I think both Houses of Parliament understood that the Government were not then in a position to produce numbers, but at that point, in those debates in both Houses, strong voices said, “There must be a business plan; there must be budgets”, and we were told at that stage that these would be forthcoming in relatively short order—but we await them. We still have a menu with no prices. We still have a lack of information about what the business plan of a nationalised Scunthorpe would look like, just as we have travelled for a year with a Scunthorpe that is run by the state and paid for by the state, but not owned by the state, making enormous losses which, according to the press, have been running at £1.3 million a day. We were offered no explanation of how long this might go on, when those green shoots the Minister reports will actually translate into real cash, how much steel this plant needs to sell and at what kind of prices before it can have a positive margin or before it can maybe halve the negative margin which it has been running at for all too long. Indeed, we were told at the point when the state took on these mighty obligations that, under the previous Chinese owners, it had been losing about £700,000 a day, so if the more recent press stories are right, the losses have clearly been considerably worse over the last year.

I understand that the Minister cannot firmly say they are definitely nationalising because they have put in this public interest test and they obviously have not yet applied the test to any project to nationalise which they are currently planning. However, reading how wide the public interest test allows the Government to be in order to satisfy themselves, I do not think it is any actual prevention of the nationalisation of Scunthorpe. I am sure they are quite clever enough to come up with a plan that is well within the details of the public interest test, widely drawn as it is in this piece of legislation, so I do not think that is a reason for not giving us proper figures.

I think it would also be good, over the course of this Bill’s debates, if we could hear a more honest statement to the workforce of Scunthorpe, because the Government say two different things. They tell the press and the rest of us—and we are very relieved to hear it—that they have saved the jobs, but then the Government still seem to be wedded to a net-zero strategy, which says that all blast furnaces of the Scunthorpe type have to close—and they are the only two left—to be replaced by electric arc furnaces. Therefore, if that is still the plan, we need to be told that honestly, and the workforce needs to be told that, because, of course, there will be a very big reduction in the numbers of people working, should they switch from blast furnaces to electric arc furnaces in the case of Scunthorpe, as the Welsh steel industry discovered when the previous Government went on that journey, carried on by this Government, to replace those blast furnaces with electric arc furnaces.

Ministers should have a personal interest in wishing to get beneath the numbers and work out how much it is going to cost, not just because of pressures on public budgets and the need to assess this against alternative ways of spending the money, but also because we read that, when the initial transfer of the liabilities and the running of the plant was made to the state, the senior civil servants apparently said to the Secretary of State and Ministers that they were not able at that point to sign off that this was value for money. They were not able to sign off that it was definitely going to be a policy that was going to work. They were not saying it definitely would not work: I think they were saying they did not have enough time and it would require a lot of very detailed work and consultation.

Ministers used their right to issue a direction to the Civil Service to say, “We think the public interest is such that this is urgent, and so we are going to ignore the absence of sign-off on value for money and on the efficacy of the policy because it is worth a shot and we, Ministers, will take responsibility”. I understand that, but, having taken that responsibility, the Ministers are under more of a personal duty to come to this House and to the other place with proper budgets and proper business plans to show that there will be value for money as they go on this course. Indeed, I think we need a year’s audited statement on what has happened so far with all that money passing to a Chinese-owned business, which the state largely controls but where it does not own the assets.

It would be good as well to be updated on where the Government have got to in negotiating with the Chinese owners. I think it is tragic that we have not had a deal with the Chinese owners. Maybe it is the fault of the Chinese; I understand that there are two sides in any negotiation. However, when I looked from the outside, just using public sources, at what was on offer when the state moved in a year ago, I thought that, as a rough rule of thumb, if the state said to the Chinese owners, “We will take full responsibility for the workforce and their future payments, so we save you all the redundancy payments you would have had to make if you had carried out your closure”, the state would take on the land and buildings in the state that they were in, probably with many environmental obligations and costs of clean-up, and that would have been another relief for the Chinese authorities of the company, because otherwise they could be liable for having to clean up the site after they had closed it.

In return, the Government should have said, “You definitely keep all the debts you have incurred during your unsuccessful period of management, and the value of your share and your land and plant we would put at £1 to complete the transaction”. Some people thought I was being a bit generous there, but I think that was the shape of a deal that one might have been talking about. According to press comment, the Government have been thinking about £100 million of compensation for the liabilities that they are absorbing to also obtain the plant and the land in its current state.

We read in the press that the Chinese say that, no, they want £1 billion for this transfer of the freehold and the shares, which would seem to me to be extremely excessive in the circumstances. I would fully support the Government pushing back very hard on that and, if necessary, defending themselves in court if they cannot get a deal. But it would be in everybody’s interest if a deal could be reached. Getting to that deal would be helped if we had a published statement of the likely business plan for an enterprise now in public control and maybe soon to be in public ownership. That would also help create a mood for the negotiations with the Chinese.

I fear that that business plan, certainly for the last year and probably for the next year or so, would produce an awful lot of red ink. It would be the background to explaining to the Chinese why the idea that they might walk away with £100 million or £1 billion is for the birds. They have presided over a heavily loss-making business and they were unable to find a way to make it work, so they were thinking of incurring massive costs of closure as the alternative to carrying on with a very high rate of losses.

Like all the other speakers in this debate, I think we want a proud steel industry again in Britain, as we were used to having over many decades. I also think there is a case for keeping a virgin steel manufacturing capability, as well as a lot of electric arc recycling steel capability. That would require a study of how much longer one could carry on with these two blast furnaces, which the state will probably own quite soon, and of what would be a sort of deep or long-term maintenance schedule if it is thought that they can carry on, because these are quite ageing plants. That would perhaps be a better option than having to think about how to find an investor who wants to establish new virgin steel-making capability in our country.

What is very clear in the wider debate of the Minister and the Shadow Minister’s opening remarks is that we will not have that opportunity—through inward investment, or domestically financed investment, or City financing through private equity, or new equity issued through the AIM market, or whatever—of steel-making capability in this country as long as our energy prices are sky high.

We heard unfavourable comparisons in a previous good speech with European competitors, but, of course, they are not the main threat. Asia and America have energy prices considerably lower. In the case of the United States of America—a first-world competitor in many fields, with a much stronger economy than the European one—its electricity prices are one-quarter of the prices that industry in Britain has to pay before any subsidy.

The Government are following a bizarre policy towards energy. They put on massive carbon and emissions taxes, and all sorts of other taxes if we dare to produce any of the energy ourselves, or else we have to pay other people’s heavy oil and gas taxes as we import so much. Then they realise that this produces energy prices that mean the loss of jobs and the mass closure of industry. We have seen refineries and bits of the oil industry go, we have seen petrochemicals go, and we have seen a lot of our steel industry and a lot of our ceramics industry go.

So then they say, “Why don’t we offer a little bit back by way of subsidy to discount the very expensive energy prices we’ve got with these very high taxes imposed on the energy?” This is a very bad way of doing it: you get the worst of all possible worlds. You deter investment because the energy prices are too high. You do not give enough back in subsidy to make the businesses competitive, so they still close. You are left with a situation where you are deindustrialising, so your import bill for goods goes through the roof. Your import bill for energy also goes through the roof because of the bad mistakes made in the energy policy. That is why the UK is struggling so much.

So I plead with Ministers, for their own sakes, to do some sums: find some numbers, work out what the business case will look like, interrogate your managers, find out what you need to do to help them to sell more steel. Unless you can sell more Scunthorpe steel, there is no point pumping money in; you will not end up saving the jobs. And please tell your workforce whether you are serious about saving these jobs and really want to carry on with blast furnaces, or whether your net-zero preoccupations mean that their jobs are doomed anyway.

UK Electricity Prices

Lord Redwood Excerpts

Thursday 4th June 2026 Grand Committee

[Lord Redwood (Con)]

My Lords, industrial electricity prices are four times the level of the United States of America’s and more than three times the level of China’s. It is no wonder that we face a disaster of deindustrialisation accelerating under this Government with the closure of the oil refineries, ceramics plants and others that the noble Lord, Lord Lilley, rightly mentioned.

This is all avoidable damage. It is self-harm on a huge scale that the Government should be ashamed of. We have signed up for dearer electricity—it was not just this Government, but this Government have signed up to it, doubled the signature and worsened the terms, making it so much worse than even the position they inherited. It was always going to be the case that, if you put on more renewables, you would have dearer electricity. It is completely wrong to suggest otherwise, because you need to pay for two systems: you need the wind power as well as 100% back-up, because on some days, particularly cold, difficult days in winter, there is no wind power at all. So you are paying twice with the back-up.

It was always going to be the case that the more renewables you put on the system, the dearer your cheapest form of energy production, which is gas generation, becomes. When you switch from gas being on baseload to gas being interruptible and brought in only occasionally when there is no wind, it works much less efficiently. The efficiency of the power station drops from over 60% to around 40%, so there will be even more carbon dioxide per amount of energy produced. Of course your costs go up dramatically, because your overhead costs for the gas power station are defrayed by a limited number of days instead of being defrayed by operating every day of the year apart from occasional maintenance. It was baked into the system that this would be less efficient and work less well.

Governments, particularly this one, have then compounded the problem by saying that gas must incur very high carbon tax charges. Of course our electricity was going to get dearer, because customers had to pay additional taxes on the gas. Why are there additional taxes on the gas? It is mainly as the noble Lord, Lord Lilley, implied: the gas was too competitive and was still cheaper even on some of the interruptible runnings that they were proposing. So you needed a big carbon tax to say to people, “This really is the dearest part of the power system, which is why we are trying to get rid of it”.

So the Government go out and sell to the public this unbelievable idea that we have uniquely dear electricity because we are producing some on gas—gas which is diminishing in volume because, when we have windy days now, there is more wind power available, so the amount on gas has reduced proportionately. They are not coming clean with the public that a series of levies and carbon taxes are the cause of very high energy prices in the United Kingdom.

The Government offered £300 off people’s bills as a lovely election offer. We all thought that that meant our bill would go down by £300, but we now learn that their down payment is £150 off a rise, so the bill still goes up. The sting in the tail, which we were not told about, is that we have to pay the £150, but out of general taxes instead of our electricity bills. For most people who go to work and pay taxes, that is no advantage at all. The Government are kidding themselves and undermining their own popularity, industry and commerce by a policy which is all self-harm.

[Lord Harrington of Watford (Non-Afl)]

My Lords, I declare an interest as chairman of Make UK, which represents 26,000 manufacturing businesses in the UK. I declare it not just because it is in the register; I am speaking in this debate because the unfair policy for pricing energy is affecting every one of those 26,000. Our members pay 25p per kilowatt hour. French and German companies in exactly the same field pay 12%.

[Lord Redwood (Con)]

It is 12p.

[Lord Harrington of Watford (Non-Afl)]

Sorry, I stand corrected: 12p. The noble Lord is right. In China, it is 3p. What does this really mean? Is it just a number? Having been on a presentation with the chief executive officer of Nissan, I can tell the Committee that that company pays more for electricity in Sunderland than in any of its other plants globally. Tinsley Bridge Ltd had to shut its automotive division in Sheffield because of energy prices—110 skilled jobs and £20 million of work went to France. That was because of energy prices. Another company, one of our members in Yorkshire, has seen its bills go up from £1.2 million to £2.4 million, not because of Iran or anything else recently but because of the cost of energy.

Why is this? International oil and gas prices are much the same everywhere. It is the price. This is the Government’s choice. Five different levies make the difference. That is policy; it is a choice that can be made. This is what makes the difference. Domestic prices are regulated, I assume for electoral reasons, but industrial prices are not and there are 150,000 small companies in this country that do manufacturing.

I had the pleasure of working with the Minister, the noble Lord, Lord Whitehead, when I was Energy Minister and he was my shadow. He is very smart and understands all these arguments, but I ask him not to respond to this debate by talking about the supercharger. That is an attempt to lower prices, very successfully, for 400 heavy users. I also ask him not to rely on BICS and its subsidies. This was announced after extensive lobbying by Make UK a year ago, when Jonathan Reynolds, then Secretary of State for Business and Trade, phoned up with glee to say that he had won a big argument around the Cabinet table and that there would be this scheme for manufacturing, affecting thousands of businesses and reducing their prices to the levels of those in France and Germany. A year later, what have we had? We have had consultations and arguments about who is included. Ed Miliband’s department tells us that it is the Treasury; the Treasury tells us that it is Ed Miliband’s department. Our members do not care: they get their bills, which are going up and up. Where is this?

I remind the Minister, who is a student of history, that every industrial revolution has been based on cheap power: water, steam, coal and oil. What now? We cannot allow the deindustrialisation of this country because of inept—I do not use the word easily—energy policy which is penalising jobs, employment and, as the Government are always mentioning, growth.

Lord Mandelson: Government Response to Humble Address

Lord Redwood Excerpts

Tuesday 19th May 2026 Lords Chamber

[Baroness Anderson of Stoke-on-Trent (Lab)]

As ever, my noble friend is exceptionally wise, but I understand why Members across your Lordships’ House have questions about what comes next and about the material. There is, as I have said, a significant volume of it to be released. We want to do this well and effectively, so that we do not return time after time with additional materials, by making sure that reviews are done effectively and internally. That is one of the reasons why additional materials were passed to the ISC after we thought all the materials had been. We need to do this in a cross-party way. I am aware that Members of your Lordships’ House have questions. I am sure that, when the next tranche of materials is released, we will be discussing their content in great detail.

[Lord Redwood (Con)]

Why has there has such a long delay in the publication of basic materials, such as Lord Mandelson’s application and his declaration of interests, which are of great interest to everyone but surely cannot pose any difficulties?

[Baroness Anderson of Stoke-on-Trent (Lab)]

My Lords, as I just said, we are looking to publish only two key tranches. The first has already been done; the second will follow shortly. The third and final tranche will be after police investigations. Those are the materials that are being withheld because the Met is using them for its work. Rather than repeatedly coming back to your Lordships’ House, we want to do this effectively in a way that works for this House.

King’s Speech

Lord Redwood Excerpts

Thursday 14th May 2026 Lords Chamber

[Lord Redwood (Con)]

My Lords, the noble Lord, Lord Alderdice, is right to warn us all that our relative prosperity and power is waning.

I have always been happy to fully support this Government’s main aim, as set out in the general election and repeated in all the economic speeches that I have heard them make. They are right that this country can achieve so much more. It can grow much faster. It can unleash enterprise and develop more business. However, I fear that my noble friend Lady Finn set out in her brilliant speech just how, for almost two years now, this Government have done everything wrong if we wish to promote growth. They have clobbered entrepreneurs instead of praising them; they have taxed people instead of rewarding them; they have taken incentives out and made it more difficult to employ young people—they seem to have a grudge against young people. Now we are presented, in this gracious Speech, with what they think is one golden thread that I think will turn out to be leaden and depressing: the idea that an EU reset will somehow promote trade, which in turn will give us that missing growth.

Let me try to help the Government think this through. Quite often, Ministers here and elsewhere tell us that we have suffered a 4% GDP loss as a result of Brexit. But all the graphs and charts of what happened to GDP between 2016 and today, in the leading European countries and here, show that there is absolutely no sign of an extra 4% drop as a result of either our voting to leave or actually leaving. If you ask Government Ministers why they think there has been a 4% drop, they say that the OBR has said it. But the OBR report is a forecast, which says that between 2020 and 2035, the British economy might grow its productivity 0.25% per annum less than if we had not left the EU. It is not forecasting any drop in GDP at all; it is not even forecasting a drop in productivity—it says that it might grow a bit slower, and if you compound out 0.25% for 15 years, you get to roughly the 4% they all wrongly cite. Ministers must be honest with themselves and the public: there was no 4% drop, and their reset will not recover the 4% that they wrongly allege has disappeared.

Let us explore the idea that increasing trade would uniquely provide growth. I fear that Ministers are again mistaken, because our trade with the European Union results in a very large trade deficit, particularly in goods. It sells us a lot more than we sell it, so if we could agree a set of policies with the EU that might increase the exports of each side by, say, 10%, which is quite a sizeable number, the deficit would rise and our GDP would fall, because the EU would export much more to us than we export to it and we would have to close down things in Britain to receive the exports we decided were cheaper or better as a result of the changes. To have the same volume, we would need to grow our exports by 17% to match the 10% growth in the EU’s exports. If you wanted to get more GDP, you would have to grow our exports a lot faster than the European Union because—I repeat to the Government—exports add to our GDP, but imports do not. If we import more German cars and close a UK car factory, our GDP goes down; it does not miraculously go up because our trade figures with the EU have gone up.

That is exactly the Government’s strategy, thanks mainly to their net-zero policies. My noble friend Lord Lilley set it all out very well. They are literally going to ban us making any diesel or petrol cars from 2030, five years earlier than they would stupidly ban them on the continent. Do they not see that that means that we would close our factories first, and definitely lose all the jobs, while Europe was still thinking about making more of these cars that people want to buy? The Government will say, “Well, we’re going to buy battery cars”. Yes, some people will buy battery cars if they cannot buy diesel or petrol cars, but most of them will probably be imported from China, or they might be made in eastern Europe and imported via that route, so the Government will not get more jobs, growth or economic activity from that source.

Here is my friendly proposal. I really want this country to do well; I want this Government to do well. I know that they are not about to fall—Prime Ministers might come and go, but they will presumably carry on governing—so I say to them: please govern well. Instead of having the wrong idea that promoting more imports from Europe and perhaps a few more exports to Europe will miraculously transform the position, I want them to put in place in Britain a series of policies for import substitution.

It is much easier for small companies to sell to people, shops and businesses near them than to go through all the hassle of exporting, however much red tape the Government think they can reduce. That would give our small businesses more chance by creating more opportunity for British production. It should be much cheaper and easier to replace imports than to try to develop exports to markets with different languages and customs which may not like what you are doing or offering. I know this well from my experience running industrial businesses, when we found that by far and away the most difficult markets to export to were France and Germany, although they were geographically much nearer. We always hired staff who loved the countries and spoke the language, but it was still much more difficult to sell there than it was to the English-speaking world, including America, or to Asian countries where English was the common business language.

We need to lift the ban on making our own petrol and diesel cars, because they have always been one of our leading exports to the continent. We need to lift the ban on getting our own oil and gas out, because they too have been leading exports to the continent. We need to get energy prices down, as my noble friend Lord Lilley rightly said. We have in the past exported a lot of petrochemicals and refined oil product, and if we are shutting all our refineries, petrochemical works, ethylene plants and so on, we will not export anything like that volume in the future.

The Government need a dose of reality and common sense and an examination of the data. It is not good enough for Ministers to say, “We will get the British economy to grow as soon as we have signed away our powers to make our own business laws and given some more money to Brussels”. They cannot identify billions of pounds of extra exports we can make at a time when they, through their policies, are ensuring that we export fewer and fewer cars and chemicals and less and less oil, gas and refined product, and are in the process of closing 21 plastics recycling plants.

As my noble friend Lord Hunt set out in another brilliant speech, there is no plan to save steel. Indeed, I heard the Minister say in her opening remarks that it is still the Government’s policy to go over to electric arc furnaces. They need to be honest to the workers in Scunthorpe: the Government are not going to permanently save the Scunthorpe jobs. They still want to sack all those people, but just a bit later, after they have wasted billions of pounds of public money on keeping open a works that is struggling to compete, in the way that my noble friend set out. I ask the Government to please level with the workers in Scunthorpe about the fact that their plan is anti-blast furnace and anti-burning coal in any sense, and to come to a decent settlement with them. The workers should not think that the Government have a solution to steel, because they clearly do not.