Autumn Statement Resolutions

Andrea Leadsom Excerpts

Monday 21st November 2022 Commons Chamber

[John Glen]

My view is that we want to maximise the productive capacity of the labour force that exists in this country. That means doing everything we can to encourage people to take the opportunities that exist across the economy.

[Dame Andrea Leadsom (South Northamptonshire) (Con)]

In my opinion, the real issue in the UK is that there are some unintended hidden cliff edges, particularly for women with children. They want to work, but once they start working for 16 hours, a lot hangs off that, such as free school lunches for one child or free childcare for a two-year-old. If they start working more hours, they are worried that they might start losing all sorts of other benefits and will not be able to afford to work. It is not a question of who thinks people are too lazy, but there is a real question for the Treasury, which I hope will be considered, on how to resolve those unintended cliff edges.

[John Glen]

I thank my right hon. Friend for her observations; she is one of the most respected voices in the House on this subject, and I am happy to meet her to go into some detail on where we are and what she thinks can be done.

I will now turn to infrastructure, innovation and growth.

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[Dame Andrea Leadsom (South Northamptonshire) (Con)]

It is a pleasure to speak in this very important debate at such a critical time for our country. There is no doubt that the headwinds that face us now are akin to, if not worse than, those in 2010 post the financial crisis. The Government should take full credit for a very well-balanced autumn statement; it ensures that those with the broadest shoulders pay the highest price for the cost of getting our economy back on track and, at the same time, that the vulnerable, the elderly and those on the lowest incomes will be able to get through the next few months as we face unprecedentedly high inflation.

I was a junior trader when sterling crashed out of the exchange rate mechanism. I was in my 20s at the time, and it seemed quite exciting to see the collapse of sterling, but within a few months interest rates peaked at 15% and suddenly it was no joke anymore. This takes me back to that time when, as a young person, initially it perhaps seemed like it was all good fun, but very quickly the reality sunk in. For far too many people that will be the case this winter, as they grapple with the rising cost of living and skyrocketing energy bills. Again, I thank the Government for what they have done to try and help.

I want to focus on what we are doing about energy. As some colleagues will know, we have a 1922 Back-Bench committee on business, energy and industrial strategy, made up of Back-Bench MPs. In April we had an inquiry into what the Government could do to help people with their energy bills this winter. Unfortunately, some of those things have been acted on but not by Government. I would like to go through them again because I think they bear repeating.

There are many things that could be done to help households and businesses reduce their energy costs this winter, such as getting energy suppliers on side to advise their customers, whether businesses or households, on some of the proactive ways that people can cut their energy costs. It might sound simplistic, but people should switch off radiators in unused rooms and take appliances off standby. I know for a fact that lots of constituents do not know how to do that, or indeed whether they would save electricity by taking appliances off standby, or whether it is better to leave them. These issues are quite simple to resolve but quite helpful to our constituents.

Reducing the radiator setting on gas boilers to between 55° and 65° would optimise the energy output. When gas boilers are installed, they are routinely set at a higher temperature; reducing that would save up to 10% or 15% on bills without any loss of output. We can reduce the temperature of hot water—we do not have to scald our hands under the hot water tap or when we get in the bath.

Better insulation of homes is just not trusted by enough people. Even people who could afford it and would like to insulate their homes have all seen stories where it went wrong—the insulation slid down inside the cavity walls, it did not work or people got mould. We need to ensure that the accreditation schemes that the Government give to providers are reliable and dependable, and that if things go wrong, people can go somewhere for help.

Vitally, there must be awareness campaigns on energy saving measures and the value of using a smart meter. I was an energy Minister in 2016 when some people were saying that smart meters were there to spy on people in their houses. To this day, some people think, “I don’t really like the idea of a smart meter,” but if they have one, they can sit there and watch the cost of their energy supply. That puts power into the hands of consumers and businesses, and would be a considerable help to them. It would be even better if the Government brought forward the move to half-hourly pricing, which is planned for within the next couple of years. That would enable people to use the dishwasher or washing machine, or to fill their hot water tank, safe in the knowledge that the price of electricity at that moment is much cheaper.

Delinking the price of renewables, and all our energy, from the price of gas has been talked about and is planned, but much more could be done to ensure that we move to that test. Now more than ever, that work should be done. We should also speed up planning for grid expansion. Recently, the National Grid came before our committee and said that there are such delays with whether we want the grid to be undergrounded or overgrounded. Those are vital decisions that have an impact on local people, but resolving them swiftly would empower the grid to speed up connections, particularly for renewables.

Of course, we know that we need to issue new exploration licences for oil and gas in the North sea basin to shore up energy security. At the same time, we must recognise and get the message out that transitioning to net zero as fast as we can requires a period of continued fossil fuel usage until we have sufficient, reliable zero-carbon energy sources. Many people feel that we have to just switch everything off, but that would absolutely fail our country—everything would switch off. We cannot possibly transition away from natural gas for several decades; we have to face up to that fact and inform people of it.

[Jim Shannon]

In my constituency, senior citizens regularly come to me and say that they are turning their whole heating system off, because they see that as a simple way not to spend any money. Does the right hon. Lady agree that the Government need to focus on and assist our elderly population in particular, so that they can do better?

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[Dame Andrea Leadsom]

The hon. Gentleman is exactly right. It is easy to assume, if someone knows how heating systems work, where energy comes from and roughly what the bills will be, that it is all manageable. If the consumer does not have that information, however, and all they see is that bills and energy prices are skyrocketing, the obvious answer is simply to switch the energy off. That is disastrous for many elderly people.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

Does the right hon. Lady not recognise that, within the windfall tax system, there is a rebate for R&D and investment, but only for companies that are investing in fossil fuels? In the autumn statement the Chancellor put a bigger hit on electricity generators, which in Scotland are almost completely renewable electricity generators. Surely we should be pushing all those companies to invest more, so that we get to net zero more quickly.

[Dame Andrea Leadsom]

The hon. Lady is right to raise the issue of how those capital allowances are offset. As I understand it—I will genuinely look into what she says—none of the big oil and gas operators is investing only in fossil fuels. Having talked to many of them over many years, I know that they are all transitioning to net zero. Some of the biggest oil companies are now some of the biggest supporters of offshore wind and solar projects. She makes good point, however, and if she is correct, I would absolutely agree.

We all know that there are so many possibilities for new sources of renewable energy. Let us not get hung up on fossil fuels versus renewables. There are so many renewable sources and zero-carbon sources, including offshore wind and Hinkley Point C zero-carbon energy, and small modular reactors are being created and prototyped here in the UK. There are so many possibilities, including with deep geothermal, coalmine water and heat networks in new housing developments. There are so many opportunities that I wish the Government were faster to look into.

The Government should certainly make the case much more strongly for the continued use of natural gas. Even the Climate Change Committee acknowledges that to generate sufficient electricity for the transition will require the use of gas until an adequate baseload capacity from reliable low-carbon sources is reached. From hydrogen to wave power, and from geothermal energy to nuclear fusion, there are so many energy sources that can tackle the energy trilemma: the triple whammy of trying to keep the lights on, keep bills down and decarbonise.

The Government have done a great job with the autumn statement—the balance was right—but where energy is concerned there is so much more to be done to provide nuance on how people can help themselves and how we can move much faster down the road to transition in a way that will be a net gain for us all and that addresses the energy trilemma.