Costs of Living

Debate between Lord Allen of Kensington and Lord Callanan

Wednesday 25th May 2022 Lords Chamber

[Lord Allen of Kensington]

To ask Her Majesty’s Government what plans they have to help consumers with rising energy bills and the increased costs of living.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, the Government understand the pressures people are facing with the increased costs of living caused by high global energy and goods prices. To help with energy, the Government are providing a £9.1 billion package, worth up to £350 each, for over 28 million households. The energy price cap ensures that prices fairly reflect the underlying cost of supply. The vulnerable continue to receive support through the warm home discount, the winter fuel payment and the cold weather payment.

[Lord Allen of Kensington (Lab)]

I thank the Minister for his reply. He will be aware that the UK inflation rate is now at a 40-year high and expected to rise further, that energy prices are at an all-time high and expected to rise further—in fact, today we are paying £1.70 per litre for fuel—and that interest rates are at their highest for more than a decade and expected to rise further. But rather than giving families a helping hand, our Chancellor has dipped his hand into their pockets, with the biggest cut in out-of-work benefits in 50 years, the biggest cut in pensions in 50 years, and the biggest tax burden in 70 years. Can the Minister say what the Government will do to reverse this situation—where more than 4 million people say they have gone without food, more than 6 million people say they have gone without heating, water or electricity, and more than one in five adults say they are worried about being able to pay their bills?

[Lord Callanan (Con)]

I do not doubt that it is an incredibly difficult time, and the Government are fully aware of the pressures facing many households. I can tell the noble Lord that we are monitoring the situation very closely, and the Chancellor and the rest of the Government stand ready to take any further steps, if they are needed, to support households.

Energy Prices: Electricity Bills

Debate between Lord Allen of Kensington and Lord Callanan

Wednesday 13th October 2021 Lords Chamber

[Lord Callanan (Con)]

Heating oil and LPG are of course not covered by any of the levies that my noble friend refers to—that is, they are separately controlled. There is a free market in them and they have not gone up nearly as much as gas prices. But as with every other utility, the energy companies pass through the cost of investment in the sector’s networks to end consumers, as well as the cost of additional energy infrastructure investment and environmental and social policies.

[Lord Allen of Kensington (Lab)]

I declare my interest as chairman of Balfour Beatty and my other interests as in the register. When, back in July, I raised the issue of the high energy costs affecting the competitiveness of our steel industry, the Minister appeared to agree. Yet since then, the Government have offered no support when energy costs have gone through the roof. This will impact on jobs and people’s lives throughout the country. As Gareth Stace put it well the other day, according to the newspapers, the energy crisis of today will be the steel industry crisis of tomorrow. What assistance are the Government currently giving to the steel sector and others that are highly dependent on energy consumption? More importantly, what are they planning to do not next year or next month but in the coming weeks to address this crisis?

[Lord Callanan (Con)]

Many of these energy-intensive industries are already freed from the cost of the emissions trading scheme by being issued with free permits but, beyond that, the noble Lord makes a good point. My colleague the Secretary of State is regularly in urgent discussions with all these industries and, of course, we are urgently seeking a solution across government as to how we can do something to help.

Steel Sector

Debate between Lord Allen of Kensington and Lord Callanan

Monday 12th July 2021 Lords Chamber

[Lord Allen of Kensington]

To ask Her Majesty’s Government what is their industrial strategy for the steel sector.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, the noble Lord will know that we recognise the importance of the steel sector to the UK economy and in supporting other domestic industries and local communities. Our broad action, led by the steel council, to create a competitive, sustainable and low-carbon future for the sector supports our plan for growth, which succeeded the industrial strategy published more than four years ago.

[Lord Allen of Kensington (Lab) [V]]

I thank the Minister for that reply. I welcome the Government overturning the decision of the Trade Remedies Authority on the removal of safeguard tariffs. I fear that, if they had not done this, the consequences for the industry would have been severe. Another severe problem for our steel sector is that the energy costs applied to steel production in the UK are far higher than those of our foreign competitors. Will the Government look urgently at what we can do to reduce this competitive imbalance?

[Lord Callanan (Con)]

The noble Lord makes a very good point about the high energy costs. We have provided more than £550 million in relief to the steel sector since 2013 to make electricity costs more competitive. Of course, we continue to keep the matter under review and to have discussions with the sector.

Covid-19: Small Businesses

Debate between Lord Allen of Kensington and Lord Callanan

Wednesday 13th January 2021 Lords Chamber

[Lord Callanan (Con)]

As I said earlier, we keep all these matters under review. We are conscious that our scheme is one of the most generous in Europe, with £280 billion-worth of support. Of course, we are always willing to learn lessons from the devolved Administrations or other countries.

[Lord Allen of Kensington (Lab) [V]]

My Lords, the FSB say that around 70% of small businesses are carrying some form of debt. Almost half of them—some 47%—are using personal loans, family loans, overdrafts, their own credit cards and personal mortgages on their properties to support their businesses. Many, including 710,000 company directors who pay themselves through dividends only when their business is in profit, have been excluded from any form of personal support. This is because the Treasury seems to have put this into the “Too difficult” box. At some point, many of these entrepreneurs will lose not only their businesses but their homes and possessions too—notwithstanding the stress, anxiety and mental health issues. What will the Government do now to stop this happening?

[Lord Callanan (Con)]

We are aware of the issue of dividends highlighted by the noble Lord. We have looked at that, but it has proved very difficult to separate different kinds of dividends. However, we have amended some of the terms of the bounce-back loans—for example, no repayments are due during the first 12 months of the loan term. This gives businesses the space they need to get through the difficult period without the worry of directly repaying in the immediately following months.

Corporate Insolvency and Governance Act 2020

Debate between Lord Allen of Kensington and Lord Callanan

Wednesday 29th July 2020 Lords Chamber

[Lord Callanan]

We are monitoring the operation closely, but as currently only one company is in the process, it really is too early to say how it will work. The exclusion relating to bonds is to protect financial stability. A moratorium could impact on the rating of those bonds and therefore the exclusion ensures the effective functioning of financial markets.

[Lord Allen of Kensington (Lab) [V]]

My Lords, since I last asked the Minister a question, more and more retail businesses have gone to the wall, leading to more job losses. Can he explain why only one company is going through the process, when literally hundreds of companies have gone to the wall? Has the moratorium process failed? If it has, what are we going to do to urgently address the new code? As footfall remains lower than pre-crisis levels, what other steps are the Government taking to avoid wider closures and insolvencies, and more and more job losses?

[Lord Callanan]

As the noble Lord observed, the measures have been in place for only a few weeks. One company has taken advantage of them, but it is an option for companies and the monitors if they think there is a possibility of the company being rescued. I can reassure noble Lords that the Government are fully committed to supporting the retail sector. In addition to the measures that have already been announced, my ministerial colleague, Minister Scully, has had regular calls with key representatives from across the sector and is working hard to address the issues it faces.

Covid-19: High Street Retailers

Debate between Lord Allen of Kensington and Lord Callanan

Thursday 2nd July 2020 Lords Chamber

[Lord Callanan]

I thank the noble Lord for his supportive comments. He will of course understand that I cannot make any commitments on what the Chancellor may or may not do in his next announcements.

[Lord Allen of Kensington (Lab) [V]]

My Lords, in a week that has seen the loss of tens of thousands of jobs, as the noble Baroness, Lady Ritchie, said, to the high street, the Government keep mentioning CBIL and CLBIL schemes, which are clearly welcome. However, a number of large retailers I speak to are being denied access to these funds because of the way that EU state aid rules are being applied. When will the Government get the European Commission to change the way it determines an undertaking of difficulty, so that we can ensure that we do not lose further retailers, employers and jobs on the high street?

[Lord Callanan]

The noble Lord raises an important point. The CBIL scheme has been unprecedented and extremely successful. We are aware of difficulties that some companies have in accessing it, for various reasons to do with either problems with the bank or the state aid rules. We are urgently looking at this problem.