Autumn Statement 2022

Baroness Hayman Excerpts

Tuesday 29th November 2022 Lords Chamber

[Baroness Hayman (CB)]

My Lords, I declare my interests as co-chair of Peers for the Planet.

The Prime Minister recently reaffirmed that, far from action on climate change and action on economic growth being in conflict, in fact there

“There is no long-term prosperity without action on climate change.”


I therefore want to look at the elements in the Budget Statement that bring those two issues together. The Chancellor pointed out that, this year, the UK will spend an extra £150 billion on energy compared to pre-pandemic levels, equivalent to paying for an entire second NHS through our energy bills. He went on to say that

“there is only one way to stop ourselves being at the mercy of international gas prices: energy independence combined with energy efficiency”.—[Official Report, Commons, 17/11/22; col. 851.]

He then signalled an acceleration of homegrown renewable energy sources, including offshore wind, carbon capture and storage and nuclear. Investment in this area, he rightly said, would not only help to address the current energy price crisis but deliver new jobs, industries and export opportunities. That is all very welcome, but there was one elephant in the room: onshore wind. It is one of the quickest and cheapest forms of energy generation, and rolling it out more quickly would help us move away from expensive fossil gas and reduce energy bills, but it was not mentioned.

It would, of course, be completely wrong to give carte blanche, without any processes or consultation, to every wind farm application made, but it is equally wrong to have the current de facto ban created by the 2015 ministerial Statement. The UK has installed 14.2 gigawatts of onshore wind capacity to date, but this has slowed dramatically to almost nothing since that ministerial Statement. We urgently need to restore balance to decision-making on applications for onshore wind.

Two years ago, I introduced a Bill to this House that did no more than put onshore wind applications on the same footing as other infrastructure projects that may be equally locally controversial to onshore wind developments—or even more so—and to deal with what to do when existing wind farms come to the end of their lives or require repowering. Polls consistently show the vast majority of the public support new onshore wind development. We do not need to overcomplicate this. We do not need new legislation. All that has to be done could be done by the very simple step of amending or removing the 2015 ministerial Statement which caused all these problems in the first place. I offer this as a simple path out of the troubles that the Government are currently having in another place. I could even offer my services as a mediator if necessary.

Turning to the new electricity generator levy, I agree with the Chancellor that there is

“no objection to windfall taxes … if they are genuinely about windfall profits caused by unexpected increases in energy prices.”—[Official Report, Commons, 17/11/22; col. 847.]

I understand the rationale behind bringing electricity generators into the scope of such taxation. But the Chancellor also said that any such tax should “not deter investment”, yet while the windfall tax on oil and gas has a generous investment allowance, no equivalent is proposed for the electricity generator levy. Considerable concern has been expressed within the industry that the disparity between the respective taxes on the oil and gas industry and renewable generators will, effectively, penalise low-carbon generators over polluting fossil fuel extractors and deter investment. As RenewableUK has said:

“Ministers now need to work with the industry to ensure that the implementation of these plans ensures a level playing-field, rather than imposing unfair burdens on renewables.”


I would be grateful if the Minister, when she winds up, could comment on how the levy will be constructed to ensure that it does not deter the investment we so desperately need in renewable energy.

Lastly, I turn to the issue of energy efficiency, where I am afraid the Statement is all about jam tomorrow and there is a sad lack of ambition. It is often said that the cheapest form of energy is the energy we never use. We have some of the worst housing stock in Europe, and the people who live in it pay not only in inflated energy costs—and every taxpayer is now doing that as well—but also in the sometimes catastrophic effects on their health. Since its peak in 2012, insulation installation rates in the UK have plummeted, and energy efficiency programmes have been bedevilled by short-termism, stop-go policies and a lack of co-ordination. We desperately need to get away from the piecemeal approach of the past and bring in a combination of policy levers. We need grants, of course, but also setting minimum energy efficiency requirements, stamp duty rebates, incentives for employers to skill up their workers, and a long-term approach that will provide consistency and certainty to the private sector, which is absolutely crucial if this is to work. It should start with social housing as a catalyst to unlock the private investment needed and scale up the market.

As a first step, the Government need to bring forward the entirety of the £3.8 billion that they committed in their 2019 manifesto via the social housing decarbonisation fund and end the burdensome and bureaucratic competitive bidding process we have at the moment. I also hope that the Minister can reassure me that the Government will not seek to reverse the measures on energy efficiency in social housing that your Lordships’ House placed in the Social Housing (Regulation) Bill when that legislation is considered in the other place.