Green Skills

Lord Lilley Excerpts

Wednesday 9th March 2022 Lords Chamber

[Lord Callanan (Con)]

I thank the noble Lord for his suggestion based on his long experience in government. I will certainly pass on that suggestion to my ministerial colleague, and I am sure we would want to learn lessons from past experiences.

[Lord Lilley (Con)]

My Lords, if my noble friend believes the Government’s strategy when it says that green energy will create more jobs at higher pay than producing an equivalent amount of conventional energy, does that not mean it is wasteful, and that green energy must be more expensive than conventional energy?

[Lord Callanan (Con)]

It is the entire sector, not just the generation of energy; it includes all the retrofitting standards, the upgrading of insulation, new homes built to higher standards and others that have been mentioned. We are confident that there will be a net increase of jobs, but we do have a legally binding commitment to net zero which we need to pursue.

Energy Prices

Lord Lilley Excerpts

Wednesday 12th January 2022 Lords Chamber

[Lord Callanan (Con)]

Before I answer the noble Lord’s question, I understand that this is his last outing as a member of the Opposition Front Bench. From my point of view, it has been a pleasure sitting opposite him and dealing with his questions and points. I am sure that he will have a lot to contribute to the House from the Back Benches in future, and I certainly wish him well.

Of course, the price cap is a matter for the independent regulator—Ofgem—and we will find out in a couple of weeks’ time what it will be. The Government have already announced £500 million for local authorities to support vulnerable householders across the country with essentials, including utility bills. As I said in response to earlier questions, we are looking at what else we can do.

[Lord Lilley (Con)]

When my noble friend considers the impact of higher energy prices, will he bear in mind the fact that, wherever the cost of meeting net-zero targets has become an electoral issue, with the gilets jaunes in France, the elections in Australia and Canada and the municipal elections in the Netherlands, the party opposing higher taxes on energy has won?

Energy Costs

Lord Lilley Excerpts

Thursday 6th January 2022 Lords Chamber

[Lord Lilley (Con)]

My Lords, I congratulate my noble friend on securing this timely and important debate. I will make four simple points.

First, higher energy costs hit the cold, the old and the poor hardest. The further north you go, the colder it gets and the bigger your heating bills. The lower your income, the higher the proportion of it that goes on your energy bills. The older you are, the more warmth you need, so the bigger your heating bills. So higher energy bills do not just target the cold, the old and the poor but are directed straight at the Government’s new supporters in the working class and the north as well as their long-standing supporters among the elderly.

Secondly, wherever net-zero policies which increase energy costs have become a political issue, they have been electorally disastrous. In France, they provoked an uprising of the gilets jaunes, forcing President Macron to rescind his diesel tax increase. In Australia, a Conservative Government looked doomed to defeat by a Labor Party waving the green flag, but when the Conservatives opposed the carbon tax they snatched victory from the jaws of defeat. In the Netherlands, when the government coalition proposed green taxes, an entirely new party formed to oppose this became the biggest single party in the municipal elections. In Canada it was a similar story for the provincial elections, and yesterday an uprising in Kazakhstan was triggered by an increase in LPG prices.

Thirdly, we will need gas for many years to come. At this very moment—or 10 minutes ago—40% of our electricity is being generated by gas power stations. Only 37% comes from renewables. Even if we install more windmills, we will need gas back-up because the wind often does not blow and the sun never shines at night. We will need gas for electricity generation for ages. There is no economic alternative. Moreover, we will need gas for home heating for years to come. Even if we go ahead and ban new gas boilers in 2030, millions of homes will continue to rely on gas for their existing home boilers to heat their homes for decades thereafter.

We have a huge gas potential in the North Sea and the Bowland shale in Lancashire. Eco-fanatics opposed using this, even though domestic gas would reduce emissions compared to importing LNG from Oman or the US. They oppose it because their priorities are deindustrialisation and virtue signalling; reducing carbon emissions is not really their top priority. We should stop caving in to them and give permission for development of new fields in the North Sea and drilling for shale gas in Lancashire and elsewhere.

Fourthly, this is not just a temporary problem. There is an acute short-term problem, which the Government should alleviate by reducing VAT on fuel to zero—as we can now do since we are outside the EU—and suspending green levies, which add 23% to electricity bills. Even after the present world shortage subsides, households will continue to face long-term rises in energy costs as long as we pursue a policy of net-zero carbon emissions without any reference to cost-effectiveness. Indeed, the cost of installing heat pumps and the necessary insulation will have a far greater impact on the households affected than has been the case with the present energy crisis. The reaction of those households will probably be enough to bring down a Government—we ain’t seen nothing yet.

I hope we will think again and take the impact on households into account.

Net-zero Emissions

Lord Lilley Excerpts

Tuesday 7th December 2021 Lords Chamber

[Lord Callanan (Con)]

The new building regulations for net-zero homes will take effect from 2025, but of course we are not waiting that long to take action. The new Part Z of the building regulations will kick in from next year.

[Lord Lilley (Con)]

My Lords, does my noble friend agree that living standards generally can rise only if we produce more output per head? Conversely, living standards will fall if we need more workers to produce our existing level of output of energy or heating. Yet this strategy says that upgrading our homes and buildings to warm them without using fossil fuels will require 240,000 more workers than at present, who will no longer be able to produce other goods and services. Does my noble friend think that reducing the average living standards of the country is what people voted for?

[Lord Callanan (Con)]

I am sure people did not vote to have their living standards reduced. Indeed, we have an excellent record of both decarbonising and growing the GDP per head of population. We have a very successful record of doing that so far, and I hope we will continue to be able to do so. I remind my noble friend that whatever our individual views on this, we now have a legal obligation to meet net zero.

Climate Change: Global Temperatures

Lord Lilley Excerpts

Wednesday 27th October 2021 Lords Chamber

[Lord Callanan (Con)]

I refer the noble Lord to the answer that I just gave to the noble Baroness, Lady Jones. Many communities in the United Kingdom rely on air travel for international and internal connectivity. Some parts of our nation are islands, separated by water that trains do not go across. Therefore, it is important to retain connectivity. At the same time, the Chancellor also announced an increase in long-haul air passenger duty.

[Lord Lilley (Con)]

Is not the premise of the noble Baroness’s Question—namely, that global temperatures are rising faster than previously predicted—the reverse of the truth? When the IPCC was established, it forecast that over the ensuing 30 years, now complete, the global temperature would rise by 0.3 degrees per decade. In fact, it has risen by just 0.17 degrees per decade—barely half that amount—and all 39 models used by the IPCC produce estimates higher than reality. Reality is actually quite reassuring.

[Noble Lords]

Oh!

Trade Policy: Environmental Considerations

Lord Lilley Excerpts

Thursday 21st October 2021 Lords Chamber

[Lord Grimstone of Boscobel (Con)]

My Lords, I am very pleased to be able to comment categorically that the leaked document to which the noble Lord refers is not government policy and is not being considered by Ministers.

[Lord Lilley (Con)]

Will my noble friend reaffirm that the Government’s trade policy is based on the facilitation of trade by the reciprocal removal of barriers, not on seeking excuses to retain protectionist restrictions we inherited from the EU, or signalling our approval or disapproval, or trying to influence non-trade policies of other countries except as part of multilateral agreements? Will he remember the 19th-century dictum that free trade is God’s diplomacy?

[Lord Grimstone of Boscobel (Con)]

My Lords, it is of course a great pleasure to have God on our side in these matters. The noble Lord is right: we are a global trading nation. Our future prosperity depends on us being a global trading nation. This will remain one of the core priorities of this Government.

Carbon Budget Order 2021

Lord Lilley Excerpts

Thursday 10th June 2021 Grand Committee

[Lord Lilley (Con) [V]]

My Lords, it is an extraordinary indication of the priorities of this place that we are considering, briefly, for one hour, with just half a dozen of us taking part, one of the biggest budgets that this Parliament has ever imposed on the British people. The nonchalance with which we embark on breathtakingly complex technological projects and impose those burdens on our fellow citizens I find extraordinary.

The impact assessment states that the cost of this budget will be £651 billion. Can the Minister confirm that that is on top of the costs of the previous five carbon budgets? I will not question the reliability of those figures. They are clearly as uncertain as they are huge and depend on as yet non-existent technologies coming on-stream, and I do not recall any large projects, from Channel Tunnel to HS2—you name it—that has ever come in on time and within budget. Why we should assume the huge array of projects comprising this sixth carbon budget will come in within the sort of cost estimates we have here, I do not know.

Ultimately, all those costs will fall on households—£41.1 billion a year, we are told. That is £1,500 per household per year. Most of those households earn a good deal less than we in this place do. It means that they will have to replace their cars with more expensive cars and dispose of their existing fossil fuel cars for a fraction of what they would otherwise get. It means they have to replace their fossil fuel boilers with heat pumps, at great cost and before they have even had to insulate their homes to ensure that they get a reasonable level of heat, though probably nothing like what they were getting when they relied on gas. It involves us doubling the electricity-generating capacity in this country so that fossil fuel power can be replaced by electric power.

What about the benefits? They are put in this document as even greater—more than £900 billion, as I recall—but none of those benefits will be enjoyed by the people who are paying the costs. The Minister quoted the noble Lord, Lord Stern, as saying that the cost of doing nothing was, I think he said, “equal” to 5% of GDP; actually, he said that it was “equivalent to” 5%.

However, that is taking costs over centuries ahead and smoothing them over the years, regardless of the fact that most of those costs will not accrue for centuries. Even in the most pessimistic forecast by the noble Lord, Lord Stern—the 95th percentile worst forecast—the cumulative costs of doing nothing are less than the cumulative benefits of the early stages of the warming of the climate until beyond 2200. So nobody in this century will benefit from postponing global warming. People in future centuries will but, again, according to the figures from the noble Lord, Lord Stern, those people will be many times better off than us; even the inhabitants of Africa will be better off then than we are now, and that is taking into account the impact of climate change on biodiversity and the environment as well as the market costs of its impact on the economy.

The cost-benefit analysis rightly says that there is a consensus among scientists that we are experiencing global climate change and that this is predominantly due to carbon dioxide and other warming greenhouse gases. That is true; no one disputes that. It then goes on to refer to “catastrophic consequences”. There is very little in the IPCC reports that suggests that there will be catastrophic consequences. If I thought that doing little or nothing or taking a more moderate approach would put at risk the existence of the human race—as Extinction Rebellion implies by its very title—or even cause its immiseration, almost no cost would be too great to avoid that.

However, the IPCC does not say that. In fact, in its economic chapter, it states:

“For most economic sectors, the impact of climate change”—


that is, if we do nothing—

“will be small relative to the impacts of other drivers … Changes in population, age, income, technology, relative prices, lifestyle, regulation, governance, and many other aspects of socioeconomic development will have an impact on the supply and demand of economic goods and services that is large relative to the impact of climate change.”

So, we talk ourselves into fear, claiming that it is based on science, and ignore the main body that we set up to provide us with evidence and forecasts.

Will it be economically and politically possible to put these things through? Initially, the answer is of course yes because the costs will be in the future, but that future is rapidly approaching. I remind noble Lords that every time the cost of trying to mitigate climate change becomes a political issue—be it the gilets jaunes in France, when Macron wanted to put a few extra pence on the cost of diesel, the impact in Holland, where a party that did not even exist became the largest in the municipal elections because it opposed the costs of climate change, or Australia, Canada—Ontario and so on—the public have reacted against the burdens that we so nonchalantly impose on them. I hope that we think twice, thrice, even four times, before we go ahead.

Carbon-neutral Homes

Lord Lilley Excerpts

Thursday 10th December 2020 Lords Chamber

[Lord Callanan (Con)]

I thank the noble Baroness for drawing my attention to the report, but we already have a digitally led advice service, Simple Energy Advice, which provides tailored advice to homeowners and landlords on energy performance improvements that they can make to their homes. It also signposts further funding and directs them to suitably qualified tradespeople

[Lord Lilley (Con)]

I draw attention to my interests in the register. Carbon-neutral homes will require a massive expansion of carbon-neutral electricity. How confident is my noble friend in the optimistic projections of the future cost of renewables and carbon capture and storage, given that most large projects—from the Channel Tunnel through nuclear electricity to HS2—feature enormous cost overruns?

[Lord Callanan (Con)]

I understand my noble friend’s scepticism on this, but I point him to offshore wind, the cost of which has plummeted over recent years. It is possible that we can meet the standards, but of course we have to be fully aware of the potential for cost overruns in the future.

Product Safety and Metrology etc. (Amendment etc.) (UK (NI) Indication) (EU Exit) Regulations 2020

Lord Lilley Excerpts

Friday 27th November 2020 Lords Chamber

[Lord Lilley (Con)]

It is a great privilege to follow the noble Lord, Lord Empey, and I follow him in the spirit of the issues he has raised. Can the Minister explain how certification and labelling will affect trade between Great Britain and Northern Ireland? Let us suppose that a supermarket sources foods within Great Britain for distribution throughout the United Kingdom, including to its stores in Northern Ireland. Surely it would be onerous, if not impossible, for the supermarket and its suppliers to have two varieties of goods, one labelled “UK CA” and the other “CE”. Who will enforce the labelling requirement on goods from Great Britain going to Northern Ireland and where will that be enforced? If it is not going to be enforced at the ports of Great Britain and Northern Ireland—and we have had assurances that it will not be—it must be enforced within Northern Ireland, presumably by trading officers, in practice, when goods are brought to their attention either by a retailer or a customer. If that is possible, why cannot Northern Ireland have the same labelling requirements as us and any enforcement on goods that filter over the border to Ireland be enforced within Ireland by its trading officers, having had the goods brought to their attention by their customers and retailers without any border controls? I simply do not understand why we have got ourselves into this invidious position.

Finally, since my time is running out, I ask my noble friend to imagine what would be the situation in the United States if Alaska had to adopt Canadian rules because tribes crossing the border insisted on that, so that any goods moving from the 48 states to Alaska would have to go through a different regulatory process. Likewise, what would happen in France if goods coming from the Hexagon had to have different rules and regulations on labelling from those in Corsica, or in Italy, if goods sold legally on the mainland could not be sold in Sicily? None of them would accept that. Are British Ministers making these points in the Joint Committee and elsewhere to our partners in Europe, and in Congress to Speaker Pelosi?

Comprehensive Economic Partnership (EUC Report)

Lord Lilley Excerpts

Thursday 26th November 2020 Grand Committee

[Lord Lilley (Con)]

My Lords, I welcome this trade agreement, not only because it secures the benefits of the existing EU-Japan free trade agreement. It goes beyond that, especially in digital and data, and, potentially, on geographic indicators and rules of origin, and it helps to pave the way for our future membership of the TTP, or the CTP—you know what I mean.

Before elaborating on those aspects, I repeat my habitual warning, like a cracked record, about the excessive importance attached to trade deals in public debate in this country and, indeed, in your Lordships’ House. Trade agreements like this are useful but far less important than most people imagine. What really drives trade is producing goods and services that people want to buy then getting out and selling them, preferably aided by a competitive exchange rate. Sadly, a significantly lower proportion of British small and medium-sized enterprises engage in international trade than is the case for similarly sized companies in our major competitors. That weakness in our business culture has been exacerbated by an exchange rate sustained at an uncompetitive level by the sale of assets, rather than by selling as much goods and services as we import.

This agreement with Japan is sometimes belittled, not just relative to the existing EU-Japan agreement but because it is not nearly as deep as the single market arrangements that we are leaving at the end of December. It is the accepted wisdom that the European single market represents the most comprehensive and deepest trade agreement that exists, whereas the WTO is treated as of little fundamental importance. I happened to be the Secretary of State for Trade and Industry who had to implement the single market legislation and helped to negotiate the Uruguay round which set up the WTO. Despite the optimistic speeches that I made at the time about how much the single market would boost our exports, we find that, over the ensuing quarter of a century, our goods exports to the 14 countries which founded the single market have little more than stagnated: they have grown by some 18%, barely 0.5% a year. By contrast, our goods exports to the 14 largest countries with which we trade just on WTO terms have grown by 80%—six times as fast—over the same period. As for the impact that either may have had on our GDP, that is almost impossible to assess, even in retrospect; it is certainly imperceptible, looking at the trend in our trade in recent decades.

I am sceptical in the extreme about the figures shown in the impact assessment of this trade agreement with Japan, and even more so about attempts to break this speculative impact down by region. As someone said, such figures serve only to make astrology look respectable. Government statisticians would be better employed trying to calculate cost-benefit assessments of the effect of the Covid restrictions on lives and livelihoods than those of the CEPA.

On the CEPA itself, the most striking element is the agreement on digital trade and data, which, according to the brief, accounts for as much 30% of our trade with Japan—a figure I find it hard to get my head around. If it is correct, the positive measures in this agreement are likely to be important to trade with Japan, and even more valuable as a template for future trade agreements across the world.

[The Deputy Chairman of Committees (Baroness Garden of Frognal)]

We now welcome the maiden speech of the noble Lord, Lord Darroch of Kew.