Net-zero Emissions Target: Affordability

Lord Fuller Excerpts

Thursday 3rd April 2025 Lords Chamber

[Lord Fuller (Con)]

My Lords, several months ago, as a new Member of your Lordships’ House, I made a proposal for a special investigation committee to try to get consensus around the various numbers that have been bandied around today. My intent was not to rerun the debate about whether net zero is a good thing, but to have a mechanism whereby we could have an honest reckoning with the public about the expense of reaching these targets. At some stage the public need to be helped to see the reality of the situation that applies to them personally, in terms of their finances, comfort and mobility. They need to see the reality of the world as it is, not through the starry-eyed rhetoric of 2007, when 2050 seemed such a long time away. The longer we leave this reckoning, the more expensive it will be, not only in cost but in public support, and the mountain we have to climb will be steeper.

The need for candour is urgent, because we are starting to see the cumulative real-life consequences of all the well-meaning initiatives promoted in the name of net zero. This month, 1,100 people lost their jobs at the Luton van plant, and more besides. The exploration industry has been exported from these shores—an industry where we had global leadership, particularly in my home town of Great Yarmouth. They have all decamped, taking their investment, expertise and tax revenues with them.

We have seen the taxing of glass bottles, which not only reduces the pleasure of opening a bottle of wine but has hammered the local pub. New green airfares make it more expensive to take the family abroad to escape the economic gloom, and we now have the dismal prospect of GB Energy trying to find uses for carbon capture and storage. I never believed for a moment that I would agree with the noble Baroness, Lady Jones of Moulsecoomb, but she and I are as one on that issue.

I do not believe in wasting energy; it is bad for business, for the taxpayer and for our children. In my own business, scope 1 and scope 2 emissions are down by 30% in a year. As a council leader, I reduced our emissions by 70%, to the extent that we disconnected the gas heating from our office, so efficient had we made it. That can be done, but there is a long-term energy transition problem to be solved and we cannot ignore that we are paying twice for every kilowatt—once for the renewables and once again for the back-up. We have the highest energy prices out of 25 countries and our electricity costs are four times that of gas on a kilowatt hour basis. Far from reducing energy costs by £300, the energy price cap has risen by 18% since July. That is unaffordable.

Governments trumpet reductions in emissions but we are all paying the price by deindustrialising. I want to spend a moment thinking about the net-zero systems that count emissions in the UK only. That leads to the insanity of allowing Drax to present itself as a green power station while cutting down American forests and transporting them across continents and oceans, to be burned in North Yorkshire. If a steel plant shuts down in Scunthorpe and we start importing steel from India that counts as a British carbon win, even if that steel is produced using Russian oil or the most polluting Chinese coal. That leads me to the madness of CBAM, the emissions trading scheme and the free carbon allowances, which are tariffs by any other name. These are astonishingly bureaucratic, expensive and complicated schemes that seek to address carbon leakage, but the effect of which is to export British jobs to other parts of the world with weaker standards.

We have ended up in a situation where the primary production of ammonia has been chased from our shores to less efficient places, which does nothing to reduce global emissions. Amazingly, our Government’s CBAM proposals fail to reward factories that somehow reuse and recycle carbon into other industrial processes, while allowing the most polluting producers to fall back on less onerous default mechanisms. By this insanity, we are introducing fiscal incentives to use the most polluting coal-fired ammonia production over the most efficient gas-fired factories closer to home. That is the reality of the rhetoric.

You can still be in favour of net zero while recognising that the accounting systems are taking us down the wrong path. We have sleepwalked into an insane, synthetic economic accounting model that lives only in the minds of Treasury wonks—not in the real world—but whose victims are British steelworkers, glassworkers, ceramicists and car workers: precisely the people the Labour Party was established to represent. We are not going to fix these problems by building a high-cost inflationary tariff wall around our economy, using smoke-and-mirrors accountancy techniques, for the longer we take to get real on the actual costs and consequences of net zero, the longer this accounting insanity will continue. I will give your Lordships an example: Defra recently did an analysis of carbon accounting techniques used on British farms and found that there were 86 competing measurement tools. It is crazy.

We are nearly half way there. Now is the time to pivot from simply wishing for net zero to focus on the real life numbers and valuation methods to test the affordability, at a family level, of the path we have set ourselves out on. We owe it to ourselves to stop the transition of a proud, global trading Great Britain into a deindustrialised, virtue signalling little Britain, sanctimoniously standing alone while everyone else digs and drills, and British industrial jobs are destroyed on the altar of decarbonisation.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Lord Fuller Excerpts

Report stage
Tuesday 25th February 2025 Lords Chamber

Moved by

[Lord Fuller]

43: After Clause 3, insert the following new Clause—
“Impact of this Act on local authoritiesThe Secretary of State must, within six months of the day on which this Act is passed, lay before Parliament an impact assessment of the cost of the provisions of this Act on local authorities.”Member's explanatory statement
This probing amendment seeks to respond to concerns about increased costs for local authorities.

[Lord Fuller (Con)]

My Lords, I rise briefly to speak to Amendment 43 standing in my name on the Marshalled List. I know that it is late, but my purpose here is to probe whether the Government really understand and appreciate the impact, damage and hurt that these national insurance proposals will visit upon councils, those who work with them to deliver essential services and the users of those services—in many cases, the most vulnerable in society.

Since the Great Reform Act 1832, local authorities have been an integral part of our nation. Joseph Chamberlain unleashed the powers of municipal entrepreneurialism in the 1800s to bring gas and clean water to the growing metropolis of Birmingham. Councils sweep the streets. They collect the bins and run parks. They issue planning permissions and curate the conditions to build the national economy one local economy at a time.

I am a councillor and, for the last 14 years, I have led local government finance for Conservative councillors at the Local Government Association. I have seen it all. My noble friend Lord Pickles once said that there are only two people who really understand local government finance. I am not saying that I am one of those experts, but I am one of the small number of people who does more than most to celebrate the 140 things that councils do to make a civil society for every family, every street, every neighbourhood and every day.

That is why I know that councils’ finances in England are under pressure like never before. Reductions in grant funding, increases in the scale and complexity of service demand, and the recent spike in inflation and wage costs have created the perfect storm for town halls. The fundamental challenge facing the sector is that cost and demand pressures are rising faster than funding. While inflation has fallen steadily since the peak, significant cost and demand pressures remain in the system. In essence, council revenues tend to grow linearly with the growth in the economy, but lately costs have grown geometrically. There comes a point where the lines of income and demand diverge so much that the gap becomes unbridgeable.

Some of the reasons for this geometric growth have been demographic: as society ages, demand increases disproportionately. Some of them have been countercyclical: as the economy stutters, demand in respect of homelessness, for example, increases. There have been some consequences of changes elsewhere in the state. Well-meaning changes by the DWP, for example, have driven up councils’ second order spend on home-to-school transport by 62.7% in the five years to 2024. Of course, the Covid hangover has made things worse. We have already reached the moment where the gap between income and expenditure has become unbridgeable, and that is before the impact of national insurance on councils and their tied contractors, which is the subject of my amendment.

This is not a case of a Tory crying wolf. Just last week, the MHCLG announced that in the financial year 2025-26—next year—the Government have agreed to provide 30 councils with support to manage financial pressures via the exceptional financial support process. For eight of those councils, this included agreement to support in prior years. These are just the canaries in the mine. In aggregate, three services are responsible for two-thirds of all the cost—adult social care, children’s social care and SEND—and these pressures have seen the greatest increases.

Let us get some numbers on the record. Increased costs and demand in adult social care have seen a rise of £3.7 billion, which is 18% since 2019-20. Spend on children’s social care increased by 25% in real terms in the five years from 2019 to this year, owing to the increasing complexity of need and rising placement costs. The Labour-run LGA tells me that, by 2026-27, these cumulative pressures will have added 12.5% to the cost of delivering services in the two years since last year, leaving councils facing an annual funding gap of £6.2 billion across the two years from 2025 to 2027, just to maintain services at 2024 levels.

These pressures come on top of councils having already absorbed a 22.2% real-terms reduction in core spending power from 2011. That is before Labour produced its reckless war on the countryside by cancelling the rural services grant. This cannot carry on. There is no more fat to trim, and I want to explain why this is so serious and consequential, because we get to the nub of the matter.

--- Later in debate ---

[Lord Fuller (Con)]

My Lords, I am conscious that it is late, and I do not sense any appetite to divide the House on this matter. I regret that the Government do not really appreciate the magnitude of what they are visiting on local authorities and, in particular, on those people, some of the most vulnerable in society, who rely on the council to fight for them and act in their corner. We are in a really sticky situation in local government, and I am not hearing any reassurance or even any acceptance that they are making a £6 billion hole over the next two years that is going to be visited on every town, street and community.

I am disappointed by the brevity and lack of detail in the Minister’s response. But I accept that it is late at night and am conscious of the time, so I will withdraw my amendment with regret and hope that at some stage the Government will at least take away the importance of this matter so that it is taken full account of in the comprehensive spending review. Councils cannot afford to carry this alone.

Amendment 43 withdrawn.