Economy: Update

Debate between Lord Agnew of Oulton and Lord Oates

Tuesday 28th April 2020 Lords Chamber

[Lord Agnew of Oulton]

I take on board the noble Lord’s point. Comparisons with other countries need to be done carefully so that one is comparing apples with apples. For example, the Swiss have not used a number of the other levers of support that we have used; this has been their main lever. Also, their furlough scheme requires employers to contribute one-fifth of the payments to the scheme, whereas in our country the furlough scheme removes that burden from businesses. In terms of the macro position, as I mentioned earlier, the Chancellor has announced support of up to 15% of GDP, which is a colossal sum of money, and he continues to be open-minded, which he demonstrated yesterday with the bounce-back loans, as to what further help the economy might need.

[Lord Oates (LD)]

My Lords, the unprecedented economic impact of the current crisis means that the recovery will inevitably be a long-term effort. Does the Minister agree that at the heart of that effort must be a green recovery strategy, and in support of such an approach will the Government accelerate plans to decarbonise the economy, focusing on job-rich opportunities such as the replacement of fossil fuel boilers and the installation of home energy measures? Finally, I note that the Minister did not address the key question raised by the noble Lord, Lord Tunnicliffe, about whether the Government supported in principle UC grants instead of loans, and I would be grateful if he would also address that point in his answer.

[Lord Agnew of Oulton]

I thank the noble Lord. Yes, I absolutely agree that the greening of the economy remains an absolute cornerstone of the future. It is worth remembering that we have done a lot more than most G20 countries in the last 10 years and it has become an increasing part of our strategy. I was delighted to discover only a few weeks ago that the contracts for difference prices on electricity generated by offshore wind turbines had reduced the cost over two years by, from memory, something colossal like 15% to 20%. We are moving to a point where this green energy generation is becoming viable in its own right. I am very optimistic about that and confident that decarbonisation will remain at the heart of it.

In terms of the specific question about transferring UC loans to grants, that is not the Government’s position at the moment. In my answer to the noble Lord, Lord Tunnicliffe, I mentioned other areas of support available for vulnerable people such as the mortgage holiday and the hardship fund. We have already allocated £500 million of that fund to support 3 million people. We have moved to protect individuals from eviction and given a lot of support to rough sleepers. I do not want the noble Lord to feel that we are in any way dismissive of the question, but at this stage the policy is to retain the loans system.