Cost of Living

Baroness Blake of Leeds Excerpts

Thursday 3rd February 2022 Grand Committee

[Baroness Blake of Leeds (Lab)]

My Lords, I start by declaring my interest as a vice-president of the LGA. I also add my sincere thanks and congratulations to my noble friend Lord Whitty. Originally, I think the cap announcement was scheduled for next Monday; I wonder whether they brought it forward in acknowledgement of my noble friend’s contribution to the debate today. Indeed, this is such an important issue, and we on this side cannot possibly keep up with the announcements made in the other place this morning. I am sure that we will get more insight into that by the end of the debate.

I am especially grateful to my noble friend for his summary of the role of the regulators, which was extraordinarily helpful in the context of today’s debate. I think we will all have found the excellent Library briefing very useful. The debate today has been first class, as I am sure we can all agree, and the contributions have helped to move us forward. As we have heard from the many valuable contributions, we are talking about policy failure on a catastrophic scale. The impact on our most vulnerable and on an ever-increasing number of people experiencing fuel poverty is, frankly, unforgivable, as is the impact on our businesses, particularly those that consume lots of energy to manufacture steel and glass, for example. The impact on all businesses will have profound repercussions throughout the supply chain and, ultimately, will put more pressure on our hard-pressed consumers.

As we heard in today’s announcement, electricity and gas bills for a typical household will go up by 54%, or £693 a year from April—even higher than the predictions discussed in the past few weeks. I am sure we have all read the heart-breaking case studies from Age UK, the citizens advice bureaux and others who have been doing their best to highlight the circumstances that people who are experiencing fuel poverty are enduring. Do any of us in this Room really understand the choices that some of our old-age pensioners are having to make between heating and eating? What must it be like to be forced to live in one room, and to be able to afford to put the heating on for only one hour in the morning and two hours in the evening? What is it like for parents going without food so that they can heat their homes and feed their children? I, too, have spoken to people who have asked food banks specifically for food that does not require heating, because they cannot afford the heating bills.

I just want to add another insight into the impact of austerity. One thing that we have not mentioned today is the impact of austerity on local authorities, forced to close public buildings such as libraries, community centres, children’s centres and, particularly, daycare centres—heated environments, often with free food as well, to which older people and parents with children could go during the day.

The context to this, as we have heard, is that the eye-watering energy price rises come in addition to the steep rise in inflation, the proposed national insurance rise, councils being forced to raise council tax as they are further starved of resources and, as my noble friend Lord Monks ably highlighted, the impact of the fall of real pay and the need to address all the issues around the real living wage and insecure employment. Basically, we are witnessing the results of the low-growth, high-tax trap that government policy has led us to, adding up to predictions of the average household having to pay £3,000 more tax in total by 2026-27.

Eleven years of this Government’s failed energy policy, characterised by dither, delay and incompetence that have created an energy crisis felt by everyone, have left us uniquely exposed. As we have heard, the Government have failed to invest in and expand our vast potential in British renewables and nuclear energy. They have also failed to invest in insulation and energy-efficiency schemes, whether in new-build homes or in retrofitting existing properties. All this is despite warnings over many years and ignoring the experience of many of our European neighbours in particular, who are well ahead of us in these areas. Examples include the reduction of the green homes grant scheme and, as the noble Baroness, Lady Scott, said, the failure to compensate for heat pumps, which have such an important potential future use.

One area that I hope the Minister will help us on is the exploration for alternatives, such as hydrogen. An enormous amount of work has been done up and down the country in this area, but we do not seem any closer to having the answers. Hydrogen was portrayed as one of the solutions for the issue of the need to refit our gas appliances, for example. These things all deserve serious investigation and we are not getting the progress that we need.

On top of this, as we have heard, there is the abject failure properly to regulate our energy market and the consequent devastating impact across all sectors. It would be helpful to understand how and why the decision to slash the amount of gas storage that we have was made. Where were the considerations around energy security factored in? Why have our exposure and vulnerability been treated so lightly? As the noble Lord, Lord Howell, asked, where are the back-up schemes? We know how vulnerable we are from the different climate emergencies that we have suffered, whether from flooding or wind, and the devastating impact that communities face when their electricity or gas supplies are cut off. Running through this whole debate is the need to address the requirements on the agenda around achieving net zero.

As my noble friend Lord Whitty outlined, this regulatory failure must be addressed by immediate measures to counter the real hardships faced by so many. I share his concern at the proposed use of council tax rebates. This is a blunt instrument with no guarantee, as it is a property tax, that it will help all those most in need. I echo his hope that the Government will accept Labour’s immediately available interventions.

In conclusion, I hope that the Minister can give us an update on the proposals put forward by the Chancellor today. We await the analysis with interest. It would be helpful to have a sense from data, which I am sure the Government must be gathering, of the scale of the problem that we are facing. It would also be useful to know whether the Government are considering, as most parties have outlined, the potential that a windfall tax could bring to help to alleviate the problems. None need that more than those 1 million extra households predicted by National Energy Action to be at risk of fuel poverty. They are the ones that need the answers that I hope we will get today. Although welcome at first sight, help of £350, which is just over half the latest price increase, will be woefully inadequate.