King’s Speech
Lord Stern of Brentford Excerpts(1 year, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Lord Stern of Brentford (CB)
My Lords, the Government’s backsliding on climate action is a deeply damaging mistake, damaging for the UK, the world and the future of us all. It is a mistake founded on a whole series of muddled and incorrect arguments.
First, on the science, the Government speak as if the issue is simply about achieving net zero at mid-century, when what matters is the path to net zero and the total of emissions over time. Rapid reduction is crucial. The Government speak of “maxing out” from the North Sea, and thus appear to fail to understand that the Paris goals imply that much of the fossil fuels already discovered must be left in the ground. The Government also leave the impression that they have not understood the immense dangers of delay. I argued 17 years ago in the Stern review that the science told us that inaction was costly and dangerous. Let us not waste any more time.
Secondly, on energy, any actions on exploration which started now would lead to the production of oil and gas primarily in the next decade. For the Paris goals, the world’s consumption of oil would need to be around 60 million barrels a day 10 to 15 years from now, relative to the 100 of today. I refer, for example, to the work of the International Energy Agency. If oil consumption reduces, as it must, higher-cost producers will be forced out of the market; that would include most of UK production. Gas consumption must fall rapidly too. The alternative to these arguments is to claim that oil and gas would not be so reduced—in other words, to bet on the failure of Paris. That outcome would be disastrous for our children and grandchildren.
Thirdly, on security, the Government appear to believe that extracting oil and gas from the North Sea would deliver energy security—yet another confusion. That production is by the private sector and sold on world markets, as has already correctly been argued. It would, in large measure, be refined outside the UK. That it could be commandeered for UK use is simply not credible. We should also be clear that UK output has a negligible effect on world prices. Energy insecurity has come from dependence on fossil fuels, much of it produced in unstable parts of the world. Energy security will come from a rapid replacement of those sources. Renewables, with storage, already produce cheaper electricity than fossil fuels.
Fourthly, on health, the Government’s prolonging of the use of the internal combustion engine prolongs the killing and maiming of many in our towns and cities through air pollution. We kill in the UK around 35,000 people a year from air pollution, 20 times the deaths from road accidents. Children are especially vulnerable. Indeed, the president of the Royal College of Paediatrics and Child Health has shown clearly that the Prime Minister’s policies involve a serious threat to the lives and health of our children.
Fifthly, on our reputation internationally, the UK’s backsliding reduces the confidence of Governments and investors around the world. As many noble Lords know, I work a lot on the international action in these areas, and I have been asked by many investors and policymakers in the United States, India, China, Africa, Europe and beyond what the UK thinks it is doing. Our actions encourage those opposed to climate action around the world to strengthen their efforts. They encourage the oil companies of the world to argue that their products can be phased out over a much longer period than is required for Paris. The Guardian reports today on a study that indicates that 96% of oil companies are planning expansion and exploration. Our hard-won leadership and respect, established through our climate legislation, emissions reductions and our successful COP 26, are being eroded or thrown away.
The growth opportunities of the 21st century lie in clean and efficient technologies and not the destructive methods of the 20th century. With strong investment in these technologies, the UK can be in the vanguard of the new growth story, but not through the increasingly backward-looking policies for energy and environment set out in the gracious Speech. Vacillation creates uncertainty, raises the cost of capital, reduces investment and is anti-growth. The proposed policies are founded in bad economics, confusion on the science, misunderstanding of energy markets and energy security, negligence on health and a failure to understand our global role and reputation.
Income and Wealth Inequality
Lord Stern of Brentford Excerpts(10 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Newby
I am not sure that I do recollect altogether. It is important to look at inequalities as well as differences because there is an additional dimension in the word “inequality” to the neutral word “difference”.
Lord Stern of Brentford (CB)
My Lords, will the noble Lord, who is my former student and was a very good student, join me in recognising that after three or four decades of being roughly constant, income inequality in the UK shot up during the 1980s, and the Gini coefficient went from around 0.25 to about 0.35 in household disposable income and has stayed there through different Administrations over the last 20 years? We moved from being one of the more equal countries to one of the more unequal countries in the OECD. Does he recognise also that the share of gross income of the top 1% has more than doubled in the last 30 years, moving from around 6% to around 13%? Are he and the Government comfortable with those levels of inequality?
Lord Newby
My Lords, I cannot but agree with my former tutor. I fear that I did not hear the last part of his question altogether, but it is very important, first, that we shine a greater light on the amount that people have been earning at the top end so that they can be subject to appropriate scrutiny, and, secondly, that people at the top end are taxed more effectively than they have sometimes been in the past. In both those respects, the Government have made some progress.
Monetary Policy Committee: Inflation
Lord Stern of Brentford Excerpts(11 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Deighton
My noble friend raises an important question: the technical unwind of the quantitative easing strategy, which is not something which would appear imminent. However when it does take place it will be done in full consultation with the Debt Management Office to ensure that we minimise any volatility to the gilt markets.
Lord Stern of Brentford
The Minister sees virtue in flexibility in monetary policy. Will he comment on the virtue of flexibility in fiscal policy?
Lord Deighton
The noble Lord is absolutely right to point out that there is an array of policy tools at our disposal. The unfortunate reality with respect to fiscal policy is that, given the enormous debts and deficit which we have had to contend with and have sought to consolidate, our room for manoeuvre is significantly diminished.
Monetary Policy Committee
Lord Stern of Brentford Excerpts(13 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Stern of Brentford
Would the Minister agree that we are fortunate that the Bank of England has taken account of the fragility of output and employment in the UK economy, and will he assure us that the Government will also take account of that fragility in setting their own policy?
Lord Sassoon
My Lords, I can confirm the first part of what the noble Lord, Lord Stern, says. What the Government will do is to stick to a very firm, clear deficit reduction plan as the background against which the Monetary Policy Committee can make its decisions with confidence.
IMF and World Bank: Appointment Procedures
Lord Stern of Brentford Excerpts(14 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Stern of Brentford
To ask Her Majesty’s Government what assessment they have made of the appointment procedures for the heads of the International Monetary Fund and the World Bank.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, G20 leaders are committed to open, transparent and merit-based selection processes for the heads and senior leadership of all international financial institutions. The UK supports this commitment as part of a broader package of reforms to increase the institutions’ effectiveness and legitimacy. Further consideration is being given to the processes for search, selection and appointment of heads at the IMF and the World Bank.
Lord Stern of Brentford
I thank the Minister for his Answer and I declare an interest as a former chief economist and senior vice-president of the World Bank.
Does the Minister agree with the assessment that the system of reservation—because that is what it is—of headships of the IMF and the World Bank for Europe and the United States respectively is outdated, unacceptable in the modern world and deeply resented by the Governments and people of developing countries? Does he also agree that past declarations of the importance of open competitions have not prevented the UK Government from participating in the continuation of these stitch-ups? Does he therefore agree that, to make the openness clear, the UK should support non-European and non-US candidates for these positions? There are many outstanding candidates. I am happy to provide him with a list. If the IMF position becomes available first, Europe must take the lead, as a matter of principle, whether or not the US tries to keep its monopoly at the World Bank.
Lord Sassoon
My Lords, I pay tribute to the noble Lord for the distinguished part that he played as chief economist at the World Bank and I therefore listen very carefully to what he has to say. I can confirm that this longstanding, informal agreement whereby the managing director of the IMF was always a European and the World Bank was always to be headed by a US citizen is well past its sell-by date. As I said, we support open and transparent appointments based on merit and in that context, while it is right and appropriate that good candidates from wherever should come forward, the UK’s position is emphatically that appointments should be made regardless of nationality or, indeed, of gender.