Covid-19: Financial Support for High Street Retailers

Viscount Ridley Excerpts

Tuesday 27th October 2020 Lords Chamber

[Lord Callanan (Con)]

I did not quite catch all of that question, but I understand what the noble Lord was saying about the difficulty the retail sector is experiencing. Of course, the pandemic has exacerbated what has been a long-term problem, so I agree with the noble Lord to that extent.

[Viscount Ridley (Con)]

My Lords, given the remarkable achievements of the high street retail sector in adapting to very difficult circumstances this year, can my noble friend say what steps the Government and the retail sector are taking to ensure that shops are safe for customers to visit in the run-up to Christmas?

[Lord Callanan (Con)]

The Government have worked closely with retailers throughout the pandemic and we continue to do so. Retailers were instrumental in the development of the Covid-secure guidance and we have invested a great deal to ensure that their premises are Covid secure. I welcome the British Retail Consortium’s campaign to encourage consumers to “Shop early, start wrapping, enjoy Christmas”.

Housing Insulation

Viscount Ridley Excerpts

Tuesday 25th February 2020 Lords Chamber

[Lord Callanan]

Given the recent horrible news from many parts of the country, particularly in the north, the noble Lord makes a very good point.

[Viscount Ridley (Con)]

My Lords, will my noble friend agree to look into why it is that, if you switch a house from oil-fired to gas-fired central heating, its energy performance certificate gets worse, not better? It is a perverse system in the regulations. I declare my interest as a landlord.

Climate Change Act 2008 (2050 Target Amendment) Order 2019

Viscount Ridley Excerpts

Wednesday 26th June 2019 Lords Chamber

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

My Lords, two weeks ago, in laying this order, my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy made a Statement in another place, subsequently repeated here, setting out the Government’s ambitions to reduce greenhouse gas emissions from a target of at least 80% to 100%. This draft order does just that by seeking to amend the Climate Change Act. The target, otherwise known as net zero, will constitute a legally binding commitment to end the UK’s contribution to climate change.

I note the attention the Secondary Legislation Scrutiny Committee has drawn to this draft order, specifically on the economic and wider societal implications. I thank the committee for its review of the order and will address these points in my speech. However, first I will set out the case for action.

Last year the Intergovernmental Panel on Climate Change published its report on the impact of global warming at 1.5% above preindustrial levels. In that report it made it clear that a target set to limit global warming to 2% above preindustrial levels was no longer enough. It made it clear that by limiting warming to 1.5%, we may be able to mitigate some of the effects on health, livelihoods, food security, water supply, human security and economic growth—

[Viscount Ridley (Con)]

My noble friend mentions “2%” and “1.5%”. Surely, he means 2 degrees centigrade and 1.5 degrees centigrade above preindustrial levels?

[Lord Henley]

My noble friend is absolutely correct. I should have said 1.5 degrees centigrade and 2 degrees centigrade, and I am grateful for that correction.

The panel made it clear that countries across the world, including the UK, need to do more.

The House has heard of the great progress we have made in tackling climate change; of how we have cut emissions—on this occasion I will correctly give a percentage—by 42% since 1990, while growing the economy by 72%; of how we have cut coal from 40% of our electricity generation to less than 5% in just six years; and of our leadership role in sectors from offshore wind to green finance. That progress has been delivered by parties across this House and by communities across the UK. But we know that this is only the start and that we need to do more. That is why we commissioned our expert independent advisers, the Committee on Climate Change, to see if we should, and could, go further than our 80% target and set a target for achieving net zero greenhouse gas emissions. On 2 May the committee responded.

In its report, the committee has told us, quite clearly, that ending the UK’s contribution to global warming is now within reach. It has advised that a net zero emissions target is necessary, because climate change is the single most important issue facing us; feasible, because we can get there using existing technologies and approaches, enabling us to continue to grow our economy and to maintain and improve our quality of life; and affordable, because it can be achieved at a cost equivalent to 1% to 2% of GDP in 2050. Due to falling costs, this is the same cost envelope which Parliament accepted for an 80% target back in 2008. That is before the many benefits, from improved air quality to new green-collar jobs, are taken into account.

The Secondary Legislation Scrutiny Committee drew particular attention to the economic and societal impacts of this transition. While this statutory instrument does not in itself place a direct burden on any other body than central government, it is right that we understand how to meet the costs of this transition in a fair and balanced way. That is why the Treasury will be taking forward a review on how to achieve this transition in a way that works for households, businesses and public finances. The review will also consider the implications for UK competitiveness. We provide full impact assessments when we set carbon budgets and will continue to do so for the sixth carbon budget when that is set.

In its report, the Committee on Climate Change made it clear that 2050 is the right year for this target and is the appropriate UK contribution to the Paris agreement; it does not currently consider it credible for the UK to aim to reach net zero emissions earlier than 2050. I thank the Committee on Climate Change for the quality, breadth and analytical rigour of its advice.

Recent months and weeks have been a time of huge and growing interest in how we tackle the defining challenge of climate change. Calls for action have come from across society, and we all know that in doing this, it is important that we take people with us. My message today is that we have listened and we are taking action.

This country has long been a leader in tackling climate change. Thirty years ago, the then Prime Minister Mrs Thatcher was the first global leader to acknowledge at the UN,

“what may be early signs of man-induced climatic change”.

Eleven years ago, Parliament—under a different Government, of a different hue—passed the ground-breaking Climate Change Act, the first legislation in the world to set legally binding long-term targets for reducing emissions. That Act, passed with strong support from all sides of both Houses, created a vital precedent on climate: listen to the science; focus on the evidence; pursue deliverable solutions. Today I believe that we can make history again as the first major economy in the world to commit to ending our contribution to global warming. I ask the House to come together today in the same spirit to support this draft legislation.

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[Baroness Young of Old Scone (Lab)]

My Lords, I declare an interest as chair of the Woodland Trust and I welcome the Government’s commitment to net zero carbon as enshrined in this instrument. I will make two very brief points. First, to reach this target, we have to move away from fossil fuels—I commend in that regard the noble Baroness’s speech immediately prior to mine—but we also have to undo some of the damage already done. One way to do that on a large scale is to plant more trees. Trees eat atmospheric carbon for breakfast. The Committee on Climate Change has called for a 9% increase in tree cover in this country. If that is to be done in the next 12 and a half years, which is the deadline calculated by the IPCC for having any hope of keeping temperature rises to below 1.5 degrees, it means 74 million trees a year. The Government’s current target is 11 million trees in the five-year lifetime of this Parliament—although who knows what that is going to be? In reality, in the past six months the Government have not even met their own target. According to figures kindly provided by Defra, government action resulted in the planting of fewer than 500,000 trees in the past six months. That is a long way off the rate required.

I recognise that the Government have now put in place some £60 million of additional funding for tree planting in the interests of combating climate change, but that is still not enough. The amendment is therefore fully justified. We need rapid clarity on how the target will be delivered. Unless planting rates are increased 50-fold, the tree element of the CO₂ reduction plan will simply fail. It can be done and it will have huge additional benefits, for biodiversity as well as a range of human health and resilience effects, reduction in heat, water resource protection, flood risk management and air quality improvement. So it is worth doing, it is effective, but it needs to be done faster. The Government’s commitment is admirable in principle, but it needs urgent practical action in the next 12 years, and not by 2050, if the impact of tree planting is to have results. So I commend the comment of the noble Lord, Lord Deben, about just doing it.

I make this comment to critics of the target. We are not doing ourselves a service by being mealy-mouthed about the costs of doing nothing. I understand entirely why the climate change committee has taken a conservative approach and does not want to try to estimate the costs of not hitting the target. But the reality is that we do not need to do that; we simply need to ask the insurance industry globally. It has recognised the impact of floods, of heat, of ecosystem destruction, and the impacts on agriculture. It is already paying out for those effects. Ask the insurance industry if you are in any doubt about whether the investment that we are envisaging is worth while.

[Viscount Ridley]

My Lords, I declare my interests in coal but also in renewable energy—wind and wood in particular. I am genuinely shocked by the casual way in which the other place nodded through this statutory instrument on Monday, committing future generations to vast expenditure to achieve a goal that we have no idea how to reach technologically without ruining the British economy and the British landscape. We are assured without any evidence that this measure will have,

“no significant … impact on business”—

but where is the cost-benefit analysis on which this claim is based? Where is the impact assessment? They do not exist. We are told that the Treasury will run exercises in costing the proposals after we have agreed them, but that is irrational. Who among us in our private life says, “Yes, we’ll sign a contract to buy a house, and only after the ink on the purchase is dry will we try to find out the price of the house”?

We are faced with a measure which is likely to cost at least £1 trillion on top of the £15 billion a year that we are now spending on subsidies to renewable energy. Let us remind ourselves just how big a sum £1 trillion is. If you spent a pound a second, it would take you 30,000 years to get through £1 trillion. You would have had to start before the peak of the last Ice Age, when woolly mammoths and Neanderthals roamed across the tundra where we now sit. Now we are talking about spending £1,000 a second for the next 30 years.

The Committee on Climate Change says that the cost will be even higher. It assumes that UK GDP will have almost doubled, from about £2 trillion to about £3.9 trillion a year by 2050, and that we will have been spending 1% to 2% of GDP every year between now and then. That means that we will have spent between £30 billion and £60 billion a year for 30 years: a total of £900 billion to £1.8 trillion. That number has been described in this debate as “manageable” and “affordable” by the noble Lord, Lord Grantchester. It has been described as “nickel and dime” by the noble Baroness, Lady Worthington. But hang on a minute—where does the Committee on Climate Change get the estimate of 1% to 2% of GDP?

--- Later in debate ---

I wonder who wrote that—it is quite beautiful—and I wonder what has happened to the Conservative Party in the meantime. You are really not measuring up to Margaret Thatcher.

[Viscount Ridley]

The noble Baroness will be aware, because she will have read Charles Moore’s excellent biography of Margaret Thatcher, that she later resiled from those views—on climate change specifically, not on other environmental issues—and said that, yes, the problem was exaggerated.

[Baroness Jones of Moulsecoomb]

Yes, I am well aware that all politicians can get it wrong at various times, and she was wrong there.

What has happened to the Conservative Party in the meantime? We have a Government who resist onshore wind installations, which would supply cheap, clean energy, while supporting dirty, expensive fracking. Fracking is not the answer: it is a way to pump more fossil fuels into the atmosphere and, in the process, allow a rapacious private company, Cuadrilla, to stifle legitimate, peaceful protest. The Government push a steep VAT increase—from 5% to 20%—for new solar battery systems while coal remains at a discounted rate, and propose a third runway at Heathrow and more roadbuilding. We seem to be in a topsy-turvy world where the Government do not understand what is happening.

At the same time, three children—three climate protesters—from the Albany Academy, are being punished for attending the youth strike for climate protests. Children fighting for their future is not a crime. A brave planet protector, Angie Zelter, has been in court this week for protesting with Extinction Rebellion. She says:

“I cannot really understand why those in power have refused to act. After all, it is their world, too”.


It is noble Lords’ world, too. Many will have children and grandchildren who will be massively affected by this issue. I wish noble Lords over there would be a little quieter. Is that possible?

Fine words are not enough to fight erratic weather patterns that cause disasters in rich and poor countries. They are not enough to clean our rivers and seas of plastic pollution, to clean our polluted air, to save the curlew and the red squirrel up north, and certainly not enough to guarantee supplies of clean water, uncontaminated food and to resist global economic collapse. Can we please have some policies that will make a difference? As the protesters outside are saying, the time is now.

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[Lord Lilley]

My recollection is the words, “look at the cost, and in particular the distribution”, which seems sensible. I endorse both aspects of my noble friend’s appeal to the Treasury.

[Viscount Ridley]

Does my noble friend agree that the Secondary Legislation Scrutiny Committee report on this order says:

“It would have been helpful for the Department to provide a summary of the work that is underway to assess the significant costs and wider impacts of the transition, to inform Parliament’s scrutiny of the instrument”?

[Lord Lilley]

Absolutely. That is what we ought to do in this House: look closely at these things. That does not mean to say we reject them. Unless we know the cost of this measure, which is potentially enormously costly, we are really buying a pig in a poke. I hope the House will focus on that point: should we go ahead and pass this without an impact assessment, or should we at least demand that the Treasury comes forward with such an impact assessment and a distributional assessment as soon as possible?

That distributional assessment is important, because these measures tend to fall disproportionately on low-income households. We have seen that in any country where the cost of climate change measures has come into political contention, those on modest incomes have tended to vote against them. We saw it in Australia and Canada; we have seen the gilets jaunes in France. We should beware and be aware that we are imposing large costs on ordinary households, and we should not go ahead and do that lightly and without knowledge of the figures.

--- Later in debate ---

The next question is a big one.

[Viscount Ridley]

I am most grateful to my noble friend the Minister and apologise for intervening. Can he address my point about why the Committee on Climate Change has not shown in sufficient detail its workings in arriving at this figure of 1% to 2% of GDP?

[Lord Henley]

My Lords, I have mentioned the Treasury review, which will be available when it comes out in due course, but that question is a matter for the Committee on Climate Change, which is independent. The committee will no doubt—I hope—consider my noble friend’s request and make that information available to him.

The second big topic I want to address in the limited time for which I feel the House will tolerate my speaking is the beginning of the question of how. I have made clear that the energy White Paper will come forward later in the summer. At this point, I have to say that, if noble Lords can be a little patient, there will be more to come before the House and more to hear. There have been accusations that, although we have met the first three carbon budgets, we are not on track to meet the fourth and fifth. We are over 90% of the way to the fourth and fifth carbon budgets, even before many of the policies and proposals in the clean growth strategy have had an opportunity to bite. But we recognise that there is a need to take further action and we are delivering that.

I shall give a few examples. I am thinking about complaints from my noble friend Lord Deben about housebuilding standards and a point made by the noble Lord, Lord Fox. The future homes standard provides that new-build homes will be future-proofed with low-carbon heating and world-leading levels of energy efficiency by 2025. We have published the carbon capture and utilisation action plan. We have announced £60 million for the next contracts for difference auction. But I note the point made by the noble Baroness, Lady Brown, about the offshore wind sector deal, which she has championed. She also very kindly mentioned the fact that I had spent lunchtime—and missed my lunch—addressing that conference, but I still had time to come here and deal with this important business. I am grateful for having had the opportunity to do so. We have also increased support for the transition to zero-emission vehicles to nearly £1.5 billion.

We are doing a lot; there is more to do. The order is about legislating to end our contribution to one of the most serious environmental challenges we face: climate change. We aim to be one of the first countries and one of the first major economies—if not the first G7 country—in the world to legislate for that net zero target. I believe we are doing, and achieving, a great deal. I do not believe that the amendment in the name of the noble Lord, Lord Grantchester, takes us any further. In fact, it is an unhelpful distraction. He said that it was likely to be misinterpreted; I have to say that it was, and is. I hope he will feel able to withdraw it.

UK Net Zero Emissions Target

Viscount Ridley Excerpts

Wednesday 12th June 2019 Lords Chamber

[Lord Henley]

My Lords, this goes back again to that point about the importance of taking people with us. So much of what needs to be done comes down to individual decisions about how people live their lives and how they are taxed. If we can take people with us it will be much easier to meet those targets. I agree with the noble Lord that it is a very pressing issue and one of the most important in front of us.

[Viscount Ridley (Con)]

My Lords, I declare my energy interests as listed in the register. Does my noble friend the Minister agree that the people in denial in this debate are those who think we could meet such an ambitious target either by renewables or by asking people to wear a hair-shirt and reduce their consumption of such things as foreign holidays? Given that solar and wind provided 3% of world energy last year, and only a little more in this country, it is unrealistic to assume that they will make a significant contribution to meeting a target like this, as people such as Dieter Helm and the late Sir David MacKay have said. Does the Minister agree that the only way we would hit such a target in an affordable manner would be if we took carbon capture usage and storage, as he has mentioned, and made that into a realistic prospect, in which this country has a definite selective advantage because of the existence of the North Sea oil industry, which could be used to store carbon?

[Lord Henley]

My noble friend makes the point that it is important that we take people with us. As he says, people are not going to wear hair-shirts or give up their holidays. I agree with him that gas will continue to play a major part in this. That is why one occasionally looks rather hopefully over to the Liberal Democrats and others to seek their support for such things as shale gas extraction. He is also right to refer to the importance of carbon capture and storage. We will continue to research matters in that area. We should also look at further research into the storage of electricity and other forms of energy; again, this came up only recently.

Businesses: Technology

Viscount Ridley Excerpts

Wednesday 10th April 2019 Lords Chamber

[Lord Henley]

The noble Lord takes me slightly wider than the original Question. Again, it is a sign of the success of the university sector that it attracts people paying large fees into universities, to the benefit of those universities and of this country. I hope that universities will then be able to consider expanding those courses.

[Viscount Ridley (Con)]

My Lords, is my noble friend aware of just how highly respected the UK artificial intelligence sector is around the world in not just research but application? It is generally trusted more than both China and the United States, and has a stronger digital industry than both Germany and France. Can the Government give something of a lead to this nascent industry through their procurement policies?

[Lord Henley]

My Lords, that will certainly be considered. In one of my earlier answers I referred to the AI sector deal, but I can also refer to the fintech sector strategy launched a year ago by my right honourable friend the Chancellor. Again, it set out our commitment to that sector remaining the leading centre for fintech.

Employment: Automation

Viscount Ridley Excerpts

Monday 1st April 2019 Lords Chamber

[Viscount Ridley (Con)]

My Lords, predictions of worklessness as a result of innovation have been coming round monotonously decade after decade—since at least the days of Ned Ludd—and have been proved wrong again and again. In fact, it is evident that innovation produces more and better jobs over the long run. Is it possible that the current alarm is because, for the first time, artificial intelligence is affecting the jobs of doctors, lawyers and people like us? Does my noble friend agree that the way to deal with this problem is to encourage people to retrain as easily as possible to take advantage of new opportunities in the new economy?

[Lord Henley]

My noble friend is an optimist, as the House will be aware. He is a rational optimist—if I may give a little plug for his book—but he is quite right to mention that there have always been worries that, with each new wave of automation, jobs will be lost. As my noble friend has said, what has happened is that, with each new wave of automation, we have seen jobs go but it is the boring, repetitive jobs that have disappeared to be replaced by machines. It might be that, as he points out, some of the boring, repetitive jobs that solicitors do, such as conveyancing, can be more easily done by machine.

Carbon Emission Reduction Targets

Viscount Ridley Excerpts

Wednesday 5th December 2018 Lords Chamber

[Lord Henley]

I am sure that the Benches represented by the right reverend Prelates, which are particularly well occupied today, will have noted what my noble friend has had to say.

[Viscount Ridley (Con)]

My Lords, research by NASA and at Peking University in Beijing, among others, has shown conclusively that there is now roughly 14% more green vegetation on the planet than there was 33 years ago and that 70% of that is the result of extra carbon dioxide in the atmosphere. Should oil and gas executives be rewarded for increasing the growth rates of forests?

[Lord Henley]

My Lords, I am going to leave the pay of oil and gas executives to their own shareholders, and what my noble friend has said is something that they can take into account. We will continue to try to meet our own carbon reduction targets and also note the comments of my noble friends. We are making enormous progress and are on track to meet our second carbon reduction target. We are the fastest decarbonating country in the G20. Moreover, as I said earlier, we will look at our energy security and other matters.

Domestic Gas and Electricity (Tariff Cap) Bill

Viscount Ridley Excerpts

2nd reading (Hansard): House of Lords
Tuesday 22nd May 2018 Lords Chamber

[Viscount Ridley (Con)]

My Lords, I fear that the Bill is flawed. I accept that we may need to tackle the “tease and squeeze” culture and that this is a manifesto commitment, but price capping and rent controls often turn out to be ineffective or even counterproductive, especially with respect to the most vulnerable. They tend to treat symptoms rather than causes and in this case I fear that they pass the blame for energy costs from the Government to scapegoats.

The pachyderm in the parlour here is that the costs of government policies vastly exceed any aggregate saving to the consumer that might come about from a price cap. Policies deliberately introduced, mainly under the coalition Government, with the full knowledge that they would push up energy prices are now coming home to roost. Telling the industry to cap prices is like fattening a pig and then demanding that it weigh less. Like worrying that in crossing the Rubicon Julius Caesar might get his feet wet, it lacks a sense of proportion.

Even if we restrict ourselves to the official data from the Office for Budget Responsibility by consulting its Economic and Fiscal Outlook from March 2018 and go to tab 2.7 of its spreadsheet, “Fiscal supplementary tables: receipts and other”, we find that in the current year, 2018-19, environmental levies will cost £10.4 billion. That is more than seven times the “customer detriment” found by the Competition and Markets Authority inquiry on which the Government are relying. It is seven times as large as the sum that my noble friend the Minister described as huge. Subsidies to renewables account for £8.9 billion of that annual sum, or 86%.

The total cost of subsidies to renewables, according to the OBR, from the current year to 2022-23 is an almost unbelievable £52 billion, as the table that I referred to confirms. It is appropriate to look towards 2023 because, under the Bill, the price cap could be extended till then. Domestic households will pay for all of that £52 billion. About one-third of it, £17 billion, hits them directly in their electricity bills, but they will pay for the rest through increased cost of living. If a supermarket has to pay more to refrigerate milk, it must recover that cost at the check-out.

Remember: none of these subsidies for renewables is actually working very well. These technologies are not market ready; they are manifest failures, still begging for subsidy after decades of public largesse. As suggested by the Dieter Helm review, to which the noble Lord, Lord Stevenson of Balmacara, referred, we are not getting emissions reductions at a reasonable price.

[Lord Teverson]

I will not argue with the noble Viscount, although I disagree with him. But one thing I would specifically point out is that a number of onshore energy companies are trying at the moment to operate subsidy free. They are being prevented in doing that largely by government policy, but they are looking for subsidy-free onshore wind.

[Viscount Ridley]

I shall come to that point in a minute.

The recent low bid prices for offshore wind were, frankly, a bad joke. They were a play on the optionality that the Government have created and tell us nothing about what is really happening in the market. Onshore wind, far from being the lowest cost generator, remains one of the most expensive when its systems costs are taken into account. That is the key point: going subsidy free, to which the noble Lord, Lord Teverson, refers, did not include the systems cost of adding wind in remote areas. Systems cost contributes to these energy prices.

Here, the Government are proposing an ineffective and probably counterproductive price cap to save, at best, £10 billion on bills up to 2023. It is probably more like £3.5 billion and may even be a negative number, when their own failed policies are already stinging the consumer for £50 billion over that period. I am sorry, but I think this makes no sense. In effect, the Government have asked the energy suppliers to be their tax collectors and are now, in an incoherent gesture, forbidding their tax collectors from collecting the revenue. The energy suppliers would be acting entirely reasonably if they were to tell the Government to collect their own taxes and take the consequent blame.

Yet I believe the situation is even worse than that because the estimate of £1.4 billion a year detriment that the CMA identifies is almost certainly an overestimate. As the former electricity regulator Stephen Littlechild put it in a letter to the BEIS Select Committee in the Commons, Oxera argued that the correct figure could be anywhere between £0.7 billion, which is half of the CMA’s estimate, and minus £0.7 billion. Adjustments of £1 billion were made after the data room closed, so they could not be scrutinised by anyone. This point has not been rebutted.

Five former energy regulators—Littlechild, Callum McCarthy, Eileen Marshall, Stephen Smith and Clare Spottiswoode—have argued, in a strongly worded criticism of the detriment calculation, that:

“In our view this is a very misleading calculation. It is not, as might be thought, an estimate of excess profit. Rather, it is an estimate of how much lower prices could be if all suppliers in the sector were hypothetically more efficient than any actual supplier in the sector today. Such an approach seems to be without precedent in investigations by any UK competition authority”.


These former regulators warn that the Bill could result in increases in lower prices as suppliers remove offers from the market to offset the cost to them of the cap, and could be harmful to competition and customers generally, a point made by the noble Lord, Lord Stevenson. So even on its own terms the Bill might well be taking a non-problem and turning it into a likely one, and it ignores the real reason why Britain’s electricity prices are so high and are hurting our competitiveness.

What does the Minister propose to do about the real £10.9 billion a year detriment to customers instead of the specious £1.4 billion? What is his estimate of the cost of renewable subsidies to the British consumer over the next five years? What does he think is the risk that this price cap will drive prices up rather than down? What weight does he put on the criticisms of the five former energy regulators?

If I have failed to do so, I declare my interests in energy, including mainly coalmining.

[Lord Redesdale (LD)]

My Lords, I declare my interest as the CEO of the Energy Managers Association, which runs courses on procurement—I can tell noble Lords that it is an extremely complicated area in the non-domestic sector—and as the CEO of the Water Retail Company, a retailer in the new water market, next to which the energy market looks positively logical.

The Minister started by saying that there has been a failure in the marketplace and this should lead to major intervention. Here I must digress. I have just been talking to my son, who is doing his politics A-level at the moment, and some of the work that he has to do is to link political ideology to certain policies. I was trying to work out where this Bill fits. One could say that it fits with Corbynism. Obviously it was introduced originally by Ed Miliband, so it is a Labour policy going backwards, but I suppose that now it could be seen as a Mayism, if there is such a thing. However, this policy does not have an ideological base; it is really just a way of trying to garner public support. Saying that energy bills are high and we want to reduce them is a very easy way of bringing about public support. The speed with which this is being introduced could have something to do with the very valid points raised by my noble friend Lord Teverson, but it could also be that people are just trying to get the political benefit of doing this.

I am not against the reduction of the cost of energy and looking the problems of the marketplace. However, for years we have been talking about the energy sector becoming one of the most competitive marketplaces in Europe. If we have a competitive marketplace that is being pushed forward, there will be winners and losers. Indeed, the problem with the marketplace is that for companies to afford the deals to bring customers through the door, there have to be tariffs where they make more money in the marketplace.

The CMA report came out with a number of assertions about the amount of money being made by energy companies. I have to agree with the noble Viscount, Lord Ridley—perhaps for the first time ever in this Chamber—that there are certain problems with that assumption. I believe that the CMA report was highlighting a problem but I do not think the figures given could be taken as anything more than indicative. The reason I raise these points is not that I believe energy companies have a right to receive a certain amount of profit, but that I believe any cap being set is fraught with a number of difficult assumptions.

The cap will skew the marketplace. It is not as easy as saying, “We will set a cap”, because certain things going on at the moment mean that the cap may have to change quite quickly. As of half an hour ago, 48.1% of our energy came from gas. Twenty per cent of our gas comes from Qatar, and the recent problems with the treaty with Iran mean that there could be problems with the Strait of Hormuz. Even if nothing actually happens, the uncertainty could lead to a rise in fossil fuel prices which will have a major effect.

The noble Viscount, Lord Ridley, said—

[Viscount Ridley]

As we are agreeing so much today, does the noble Lord agree with what the Energy Minister said yesterday: these are reasons why we should get on with shale gas in this country?

[Lord Redesdale]

I am very tempted to go down that line. Of course, we could become energy independent if we were to use shale gas—for a whole seven years, and then it would be gone. I am not sure it is such a long-term solution.

There is a real issue about the cost of fuel, although wholesale costs will of course be a smaller amount compared to levies. However, we have to move to a low-carbon economy, away from our present one, although today, no power whatever was being generated by coal.

The Bill is flawed. It is being taken forward at great speed. Many people are saying that it is a popular Bill, because we all want to reduce the cost, especially to the most vulnerable, but I ask the Minister to look again at three things in the Bill which I know will be raised in amendments.

First, I ask him to reintroduce the CMA as the body that reviews any price cap. I do not suggest that this would hold up the process in any shape or form—a point raised by the noble Lord, Lord Hunt—but as the CMA is used as the backstop for most other Bills as good practice, leaving it out of this measure seems slightly perverse.

Secondly, I hope, following the Minister’s statement in another place that renewables tariffs may well be exempt from the price cap, that that provision will be introduced. I am thinking of shifting to a renewables tariff that would be higher than the price cap. I am prepared to pay more for a renewable source of energy. That is probably a point on which the noble Viscount and I disagree, but there is value in renewable energy. Although the Minister talked about ensuring that that was the case, I should like to see something in the Bill.

Thirdly, one problem often raised by energy companies, as well as the risk that they face from global politics, is regulatory risk. I find it interesting that the last substantive clause in the Bill says that this tariff rate might end in 2020, but it might go to 2021, 2022 or 2023, at which point it must stop. That is a difficult assertion to make, considering that companies buying large amounts of energy for the future have to make certain assumptions about where the price will be and what regulation they will face in future. On that point, I look forward to the next stage of the Bill.

Climate-related Financial Disclosures

Viscount Ridley Excerpts

Tuesday 30th January 2018 Lords Chamber

[Lord Henley]

My Lords, I accept what the noble Baroness is saying: that is very useful information for investors and others who are interested in what the companies are up to. We explicitly ask for feedback on those TCFD recommendations and whether they should be mandatory in the long run. However, one has to balance against that the fact that it potentially imposes a burden on businesses, and one would have to look at how exactly that should be done. At the moment it is not mandatory. We will consider that in due course, but at the moment it is best that we analyse the responses we have had to the various consultations and then come forward with our recommendations.

[Viscount Ridley (Con)]

Does my noble friend agree that climate-related financial disclosures should take into account the fact that the consensus among climate economists and, indeed, in the Intergovernmental Panel on Climate Change, is that the economic impacts will be positive for the next 40 or 50 years?

Businesses: Start-ups

Viscount Ridley Excerpts

Monday 20th November 2017 Lords Chamber

Asked by

[Viscount Ridley]

To ask Her Majesty’s Government what conclusions they draw from calculations by the Centre for Entrepreneurs that 660,000 start-up companies were founded in 2016.

[Viscount Ridley (Con)]

I beg leave to ask the Question standing in my name on the Order Paper, and in doing so I declare my interests as listed in the register.

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

My Lords, the Government are working hard to ensure that the United Kingdom is the best place in the world to start and grow a business. While there is no single source of data on the start-ups, the Government agree that the numbers engaged in enterprise is at a historic high, which shows that entrepreneurship is thriving in the United Kingdom.

[Viscount Ridley]

I thank my noble friend for that reply. Is he aware that there was a record number of start-ups in 2015 and 2016 and that, according to the Centre for Entrepreneurs, there is likely to be another record in 2017; that we are third in the world for start-ups, second only to Silicon Valley as a centre for the tech industry; and that we have three times as many unicorns—that is, $1 billion start-ups in tech—as Germany? However, while this entrepreneurial revolution is a welcome result of government policy since 2010, does my noble friend agree that what is needed now are policies to help small acorns grow into big oak trees without selling out too early? In that respect, will he perhaps look at Rishi Sunak MP’s proposal for a retail bond market for SMEs?