European Political Community

Lord Bridges of Headley Excerpts

Monday 31st October 2022 Lords Chamber

[Lord Goldsmith of Richmond Park (Con)]

My Lords, there were no formal conclusions from the summit itself but progress was undoubtedly made in a bunch of areas and key priorities for the UK. For example, the former Prime Minister and President Macron issued a joint statement confirming plans to finalise arrangements to proceed with the Sizewell C nuclear power station by the end of the month—to be built, as noble Lords will know, by EDF. There was also agreement to enhance broader civil nuclear co-operation, to conclude a bilateral agreement on illegal migration, and to hold the first bilateral summit since 2018 in France next year.

[Lord Bridges of Headley (Con)]

My Lords, on the list that my noble friend just read out, he did not mention the use of interconnectors between the UK and the EU and what would happen in the event of an energy emergency. My understanding is that there is no agreement between the UK and the EU to cover such an eventuality. Was this discussed at the summit and what progress is being made to implement such an agreement?

[Lord Goldsmith of Richmond Park (Con)]

My Lords, it will be for BEIS to provide specific details on next steps in relation to this issue but I can confirm that it was discussed. The former Prime Minister pushed for the development of new North Sea hybrid interconnectors to accelerate renewables capacity, among other things, but I am afraid that I will have to leave the outcome to colleagues in BEIS.

Universal Credit (EAC Report)

Lord Bridges of Headley Excerpts

Wednesday 23rd March 2022 Grand Committee

[Lord Bridges of Headley (Con)]

My Lords, I start by congratulating my noble friend Lord Forsyth and the committee on their excellent report. I had zero hand in it and agree with it entirely. It is always difficult to follow my noble friend Lord Forsyth on occasions such as this, because I feel that I am repeating everything he has said—he is so eloquent at summing up reports.

I am not going to go through the entire list, but it strikes me as an incredibly comprehensive critique of how universal credit should be improved. Reading the Government’s response, I too was very disappointed by its tone and substance—and, like the noble Lord, Lord Shipley, I was surprised by the Government’s surprise.

Something more fundamental than this strikes me. As we just saw in the Chamber, this entire area of policy, especially the issue of the £20, is uniting Members on all sides of the House. This area of policy needs a fundamental reassessment, for reasons that I will come on to, but especially for the reasons the report sets out: the five-week wait for the first payment; fixing the level of awards for three months; rebalancing the sanctions regime; the abuse of universal credit to recover debt, as the right reverend Prelate mentioned; and, perhaps most important of all, making the £20 a week uplift permanent. All these recommendations seem to make perfectly eminent sense—and that was the case when the report was published.

Let us remember, as the noble Lord, Lord Shipley, said, that the world is now fundamentally different. Back then we were in the first phase of the crisis called Covid and inflation was still seen as under lock and key, or thereabouts. Oil was at $40 a barrel. Today, we have heard that prices are rising at the fastest rate for 30 years and oil is at $120 a barrel. It really is the case that the past is a foreign country; we did things differently there.

As we look ahead, we see energy bills rising by 50%-plus in April alone. As we heard in today’s Statement, households are facing the biggest fall in disposable income per person since the 1950s. Meanwhile, the backdrop to this is that the tax burden is on track to be at its highest since the 1950s, while debt is at its highest level since the 1960s. It is worth noting, as this is the backdrop to all the policies that we are addressing, what that means. As we heard in today’s Statement, interest payments are set to hit £83 billion in the next fiscal year. That is a record level—more than is spent on schools, the Home Office and the MoJ combined.

So wherever I look on the economic dashboard, I see the lights flashing red. As the noble Baroness, Lady Lister, and the noble Lord, Lord Shipley, said, this is an emergency. At times in politics we are apt to use the word “crisis” in a slightly flippant way. But this is a crisis, and it really is one for those who are on the lowest incomes. I think all of us here share a sense of responsibility and a sense of wishing to take real and urgent action to address that.

As the OBR warns today, and as my noble friend pointed out, benefits are going up by 3.1% in April, but inflation is set to average at 8% in 2022-23 as a whole. Before today’s Statement, low-income households face a real-terms cut in income just six months after the £20 per week cut to universal credit. Let us remind ourselves what all this amounts to. The Child Poverty Action Group’s analysis shows that families’ universal credit will fall in value by £570 per year on average. The Joseph Rowntree Foundation has calculated that 400,000 people could be pulled into poverty by this real-terms cut to benefits. Families with children in poverty will face £35 per month in extra energy costs even after the Government’s council tax rebate scheme is factored in.

That is before we get to other issues that we should be concerned about. One that I am very concerned about is the rising cost of food. Wheat prices are already up 40% this year alone. That is before we get to the threat of another hike in energy bills in October. Citizens Advice forecasts that 14 million households will struggle with their bills. That is one in four adults. Let us put all that together: we cannot continue with business as usual.

I absolutely applaud some of the measures taken today but, as the document from the OBR makes clear, total tax and benefit changes in today’s Statement offset only about a third of the overall decline in real per person disposable incomes. That assumes that this crisis does not deepen further. Although I welcome some of the measures in today’s Statement, I cannot help but think that we are giving with one hand and taking back with the other, creating a piecemeal system that is extremely confusing.

I ask a simple question, building on what others have said: why are the Government not taking the simpler and more straightforward approach of using the welfare system and reforming it to help those on low incomes and committing to the policies set out in this report? I know that the Minister will argue that the increase in work allowance and the cut in taper are an effective tax cut. We heard that from the Chancellor on Sunday. But what does she say to the Resolution Foundation, whose analysis shows that around three-quarters of families—that is 3.6 million—on universal credit in 2022-23 will be worse off under the new regime than they would have been absent the last Budget changes but if the £20 per week uplift had been retained? That is question one.

Secondly, picking up on what my noble friend said, what does the Minister say to the finding that the overall marginal effective tax rate for universal credit families earning over the work allowance will be 70% in 2022-23? This is the same rate as experienced by families receiving tax credits from 2003-04 to 2010-11. How does this 70% marginal tax rate square with the Government’s assertion that they will ensure that “work always pays”?

Finally, as I said in the Chamber earlier, I fear that we have lost sight of one of the best ways to help those on low incomes, which is to provide them with jobs and job security. I have to repeat what I said in the Chamber: the rise in national insurance is absolutely a hammer-blow to many of the people we are talking about whom we wish to help and the businesses that employ them. Of course I welcome today’s announcement regarding thresholds and likewise I welcome the employment allowance, but I note that today the Institute of Directors has commented that this measure is marginal for employers.

We have to consider what the national insurance rise will do, not just for employees but for employers. Let us consider the sectors that will be worst hit, which are the ones that have been worst hit by Covid: distribution, transport, hotels and restaurants. How will this measure help them create jobs? How does it help them encourage investment? How does it make them more competitive? How does it help them to keep their costs low? I hate and dislike everything about this tax rise. It is taking us in the wrong direction. But the key point that is relevant to this debate is that it exhibits a lack of strategy and a lack of principle that bedevils this Government. It does nothing to help those on low incomes who need that job security.

The question for my noble friend the Minister, who I fear might get a bit of a tough time this afternoon, but I know she can take it, is whether the Government are really doing enough to help those on low incomes. Are they really rising to the moment? Do they still see this as business as usual or are they treating it as the emergency that it really is?

Russia: Sanctions

Lord Bridges of Headley Excerpts

Thursday 3rd March 2022 Lords Chamber

[Lord Ahmad of Wimbledon (Con)]

I am sure that the noble and gallant Lord will appreciate that I will not go into specifics on what steps we are taking next. I assure the noble and gallant Lord, as my right honour friend the Foreign Secretary has said, that all options are very much on the table on how we can further pressure Russia to do the right thing. If it pulls back from Ukraine, talks can begin. All credit goes to the Ukrainians who are engaging in this initiative on the Belarus border. At the same time, Russia is, as I said yesterday, holding a trigger to the head of the Ukrainians and claiming that they believe diplomacy to be the route forward.

[Lord Bridges of Headley (Con)]

My Lords, first, I applaud my noble friend for all he is doing. Given that the aim of the Government is to stop the financing of President Putin’s war machine—and given that he has just said that nothing is off the table—can the Minister confirm that the Government have not ruled out calling for the complete cessation of all European imports of Russian oil and gas, and of all payments for Russian oil and gas under existing long-term contracts? Can the Minister also confirm that the Government have not ruled out banning Gazprombank and Sberbank from SWIFT?

Climate Change: COP 26

Lord Bridges of Headley Excerpts

Thursday 18th November 2021 Lords Chamber

[Lord Bridges of Headley (Con)]

My Lords, I congratulate the noble Baroness on securing this debate. I attended COP in my capacity as an adviser to Banco Santander, as recorded in the register. Banco Santander is a member of the Glasgow Financial Alliance for Net Zero, which the noble Baroness mentioned. GFANZ is a horrible acronym; a 1990s pop band comes to mind.

I left as a slightly worried optimist. I pay tribute, of course, to the extraordinary work that Alok Sharma and my noble friend did. I left optimistic because Glasgow was fizzing with ideas of new ways to harness the power of the market and of the private sector to get to 1.5 degrees. I am optimistic because, as the noble Baroness and others have said, further commitments were made on coal, forests—where my noble friend made a massive contribution—shipping, methane, carbon markets and of course finance. I am optimistic because, although much more needs to be done at pace, there is now, I sense, real momentum to turn words into action. Clearly, the task over the next 12 months, as others have rightly said, is to keep that momentum up.

However, I am worried not just about the lack of commitment from certain countries, but even more, if noble Lords will forgive me for saying it, about the need to keep this debate in context. As we turn our commitment into action, we cannot afford to ignore the other challenges we face, the most immediate of which is growth. We need economic growth to fund the transition. We cannot, as others have mentioned, have a green strategy unveiled one day and a separate growth strategy or budget unveiled the next. We need a clear strategy for green growth. I ask a question—a hypothetical one, as I do not expect my noble friend to answer it. How does allowing the tax burden to hit its highest level for 70 years, its highest level in peacetime, doubling the number of higher rate taxpayers and increasing corporation tax rates encourage investment and enterprise? Is that the path to growth?

Related to that—it is the point that the noble Lord, Lord Browne, has just been talking about—is energy: we need, as he so eloquently put it, reliable, affordable, renewable energy to power growth. All across the world, we see energy prices rising. Meanwhile, however, investment in oil and gas exploration has fallen. That second point is good news for hitting net zero, but demand is going to rise, especially in developing countries. It is clear that we are walking a tightrope between the fossil fuel past and the renewable, carbon-free future. Real care is needed as we consider new taxes and green regulations. Prolonged higher energy prices could stoke inflation and push up interest rates. I would be grateful for my noble friend’s thoughts on how the Government plan to walk this tightrope in their domestic policies and their international approach.

In passing, I want to flag another challenge that we sometimes ignore and forget when we talk about climate change, which is that, as we go green, we are also going to have to pay for an ageing population. The IFS forecasts that by 2030-31 the additional pressures on that alone will total £18.5 billion on top of the level of 2025-26. We will have to pay that bill as well as the cost of going green.

My final point is one that the noble Baroness, Lady Parminter, made: we have made these pledges and we now need real progress to mobilise not just Governments and companies but people, to help them go green and to make it easier and cheaper for them to do so. My final point is on retrofitting homes and clean energy. Planning, skills, finance, energy supply: these separate challenges need a co-ordinated approach across government to provide a clear framework, so companies and people can invest with confidence. I look forward to reading the new road maps that the Prime Minister has said will be published soon, to see how he will join the dots and ensure that government departments, local authorities and business work together.

I am optimistic, yes. The necessity of the green transition offers untold opportunities, but it does not sit in a silo; it touches on everything we do and everything has an impact on it. Without a coherent strategy that tackles all these challenges in a clear way, we may land up without the economic growth that we need to fund the green transition.