King’s Speech

Baroness Whitaker Excerpts

Monday 13th November 2023 Lords Chamber

[Baroness Whitaker (Lab)]

My Lords. the gracious Speech reaffirmed the Government’s commitment to net zero, but without much detail. May I fill some of that gap by advocating more action from the Government on wave energy? I declare that I am completing a fellowship in wave energy for the IPT and I am a member of Peers for the Planet. I am also grateful to Richard Arnold of the Marine Energy Council for factual information.

The Intergovernmental Panel on Climate Change says that waves are the world’s largest untapped energy resource. Our Science and Technology Committee encouraged development as long ago as 2001, with a positive response from the then Minister, my noble friend Lord Hain. Our abundant, vigorous waves are more predictable than our wind and sunshine. Since wave energy is seasonal, mostly available over the winter, its use fits well with demand. It is estimated that just over 12 gigawatts of wave and tidal stream energy would save the UK £1 billion in energy system costs, as this would avoid the expensive generation and storage we would otherwise need in our future dependence on intermittent renewables. Research has supplied various working models, which I have seen in our universities.

The Energy Minister, Graham Stuart—I think he is still the Energy Minister—told parliamentarians that there was no technical problem inhibiting commercial scale-up, so what are the obstacles? The private sector lagged behind. There is a national problem in the recruitment and training of mechanical engineers. Later Governments did not help, and it was only some EU schemes that filled the gap. We cannot rely on the market to innovate when the benefits may be long-term. Underpinning by the state has a crucial role. For instance, costs would also be saved by co-locating wave and wind energy. Research projects on combining wind and wave sites can apply to UK Research and Innovation for funding, as the noble Lord, Lord Callanan, has said, so why not a government pilot scheme to demonstrate the advantages? We need technology stimulus as well as market pull strategies.

Had the Government stepped in, some estimate that an increase in the technology learning rate of 10% to 15% could have reduced the total investment needed for wave energy to deliver over 6 gigawatts by 2050 from £20.5 billion to £3 billion. This could still be done if the schemes were introduced now. There are many sites for development off our western coasts. What discussions will take place with the devolved Governments, particularly in Scotland, where the biggest wave resource is? Only Wave Energy Scotland has seized this opportunity for funding.

The Government’s scheme, contracts for difference, has finally included wave energy, but as it has not received any support for development, it is more expensive than other technologies for the time being, so a ring-fence is needed. We need a better consent process. Consent is required for a project for over 1 megawatt for marine energy to be eligible to bid for a contract for difference, unlike onshore wind, where the ceiling is 50 megawatts. However, this can take up to four years, often longer. I heard much concern about this when I visited research sites. The EU target is three months.

Tide and wave energy are put together, obscuring the relative paucity of wave energy support. It needs its own category. The Government are consulting on this subject. Where have we got to? Will there be assistance in capacity building for the consent process? We are being left behind. CorPower in Portugal has started exporting wave energy to the grid. In the USA, the Senate in California unanimously passed a Bill to support wave and tidal energy, and the EU funded the Saoirse project in Ireland with a share of £250 million.

Finally, the government-funded Supergen reports by Edinburgh University have set out in detail really significant opportunities to increase clean growth substantially through adding tidal stream and wave energy to the renewables mix. I commend them to the Minister, and I implore the Government not to waste the potential of one of our strongest national assets in hastening the abandonment of fossil fuels, in which we could still, with support, be a world leader.

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[The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)]

My Lords, I add my words of welcome to the right reverend Prelate the Bishop of Norwich and my noble friend Lord Gascoigne and congratulate them both on their maiden speeches. I am sure that they will prove to be valuable Members of this House. The noble Baroness, Lady Hoey, put it well when she described my noble friend Lord Gascoigne as “discreet and decent”. I have always enjoyed working with him over many years in the past, and I look forward to working with him in the future. I also welcome back my noble friend Lord Wakeham to this House, and also welcome the optimism that he brought in his remarks about the opportunities of the future.

Much of today’s debate has focused on the Government’s record on the economy and our plans to grow it in future, so I thought it worth taking some time to go over the facts. Since 2010 the UK economy has grown by more than 24%, faster than France, Germany, Japan, Italy, Spain, Austria, Finland, Belgium, Portugal, and the Netherlands. At the same time, borrowing is forecast to have fallen by 4.7 percentage points, more than that of any other G7 member. We have halved unemployment and cut inequality, and reduced the number of workless households by 1 million. In fact, since 2010, 4 million more people are now in work, with more than 1 million new businesses created.

Increases in tax thresholds made by successive Chancellors mean that people in our country can earn £1,000 a month without paying a penny of tax or national insurance. At the same time, educational outcomes have consistently improved. All this has been delivered while we have cut our carbon emissions by more than 48% between 1990 and 2021, delivering net zero faster than any other major economy.

We also have a bright future ahead of us. We are ranked number one by the World Bank among major European economies as a place to do business. We are home to Europe’s largest life sciences sector, which helped produce a Covid vaccine that saved 6 million lives and a treatment that saved 1 million more. We are only the third country in the world to have developed a trillion-dollar tech economy. Our film and TV industries are the largest in Europe, and our creative industries are growing at twice the rate of the rest of the economy. We are a world leader in offshore wind, behind only China in the scale of energy production.

But we are not complacent, not least because of the unprecedented shocks our country and economy have faced in recent years. The Covid pandemic forced us to take decisions to shut down large swathes of our economy and made huge demands of our public services, as the NHS went on to a war footing, and teachers and families had to adapt to moving learning for millions of children online and at home. The Government also stepped forward with unprecedented support totalling more than £350 billion during that period. The furlough scheme protected 11.7 million jobs and livelihoods. Our loan support schemes provided lifelines to 1.6 million businesses, as well as cutting VAT for the worst affected, providing a business rates holiday for more than 750,000 businesses, and protecting our arts and cultural sectors through the nearly £2 billion culture recovery fund. We supported our public transport systems with more than £12.8 billion of funding, our NHS with £81 billion of Covid ring-fenced spending, and our schools with nearly £5 billion towards educational recovery since the 2020-21 academic year.

In 2022 we emerged from the pandemic earlier than many other countries thanks to our vaccine rollout, and our economy grew at the fastest rate of any G7 nation. But in March of that year, we faced a further global shock after Russia’s illegal invasion of Ukraine. Energy prices shot up, adding to inflationary pressures caused by global supply chains needing to rebuild after Covid. The noble Lord, Lord Livermore, sought to lay the blame for inflation and therefore higher interest rates at the Government’s door. However, given his emphasis on Labour’s respect for the independent Bank of England, perhaps he will defer to its analysis from the August Monetary Policy Report this year, which explained:

“High inflation has been caused by a series of big shocks. The first shock was the Covid pandemic … The second shock was Russia’s invasion of Ukraine … The third shock was a big fall in the number of people available to work”.


In May the IMF confirmed that we have taken “decisive and responsible” action to bear down on inflation and achieve the right balance of fiscal and monetary response, while also focusing on growing the economy.

The noble Baronesses, Lady Sheehan and Lady Bakewell, asked what the King’s Speech is doing to support households with this higher cost of living, but they neglected to recognise the significant ongoing support already in place. Over the past year, government support paid for about half the average household energy bill and provided one of the largest household support packages in Europe. We extended the temporary 5p fuel duty cut and a freeze to fuel duty representing a saving for the average driver of £200 since the record 5p cut was introduced.

I reassure the right reverend Prelate the Bishop of Durham that we have targeted our support at the most vulnerable, with cost of living payments to more than 8 million households on means-tested benefits and 8 million pensioner households, and to 6 million people on disability benefits, worth respectively £900, £300 and £150 this year on top of payments of £650, £300 and £150 last year. This is in addition to uprating benefits by 10.1% this year in line with inflation and protecting the triple lock for around 12 million pensioners, worth £11 billion.

My right honourable friend the Chancellor confirmed that the UK Government will accept the Low Pay Commission’s forthcoming recommendation on the increase in the national living wage from April 2024, currently forecast to increase to at least £11 an hour. This means that the annual earnings of a full-time worker on the national living wage will increase by more than £1,000 next year.

There is no doubt that we have faced real challenges over the past few years, but this Government have stood by the British people every step of the way. When we look ahead, the Prime Minister has set three clear priorities for the economy to ensure that we recover from the shocks we have faced and once again release the potential of this great nation. First and foremost, we remain steadfast in our commitment to cutting inflation, the most insidious tax on household budgets there is. We are on track to deliver our aim to halve inflation this year as a staging post to returning to the 2% target, and decisions by the Bank of England’s independent Monetary Policy Committee remain the primary tool for controlling inflation.

It is also essential that fiscal policy acts in support of, rather than working against, monetary policy. That is why the measures taken by the Chancellor at this year’s Budget were focused on easing some of the longer-term drivers of inflation. Indeed, the reforms announced at the Budget were the largest supply-side measures ever scored by the OBR.

We have also taken the difficult but necessary decisions needed to control public sector borrowing. Additional borrowing would increase aggregate demand and place further pressure on inflation and interest rates. The noble Lord, Lord Leong, asked about the current level of government debt and the cost of servicing it. Government debt currently stands at £2,702 billion, and the OBR March forecast put debt interest costs at £94 billion this financial year. This figure puts into stark relief the challenge before us, set out so ably by my noble friend Lord Bridges. I say to my noble friend that, while it was absolutely right for the Government to step in in response to Covid and the energy price shock, an ever-growing state cannot be the new norm, particularly in a future where we know there will be growing demands on the state, whether it is to support the energy transition or to harness and respond to the technological revolution—challenges to future global growth so eloquently set out by my noble friend Lady Moyo. As my noble friend Lord Bridges said, the future will demand clear choices from government about what it can and should do and a relentless focus on productivity in the public sector and, as noted by the noble Lord, Lord Londesborough, in the private sector.

I reassure noble Lords that these themes and concerns drive this Government forward. In contrast, despite the valiant attempt by the noble Lord, Lord Livermore, to reassure noble Lords of Labour’s commitment to fiscal responsibility, despite its record in government, he failed to explain how Labour’s plans to spend £28 billion extra every year could be paid for without additional tax hikes or adding to this borrowing burden.

Getting debt falling is essential in ensuring that we do not pass on the burden to future generations who would have to pay it off. It provides space to allow government to respond to future shocks and reduces spending on debt interest that could otherwise support public services—or, in response to my noble friend Lady Noakes, put money back into people’s and businesses’ pockets through cutting their tax burden. As an aside to my noble friend Lord Balfe, I reassure him that we have delivered on George Osborne’s commitment to cut inheritance tax.

In its latest forecast, the OBR confirmed that the Government are on track to deliver their debt target. However, challenges remain: borrowing and debt are high by historical standards, and the headroom to debt falling is historically low. Controlling inflation and getting debt falling provide the foundations for our third priority: long-term, sustainable growth. Growth is the key to building confidence, security and hope for the future. It rewards aspiration and invention, creates freedom and choice, and strengthens our communities and our country. As my noble friend Lord Forsyth put it, it is the prerequisite for any action by government to support vulnerable households and essential public services.

The Spring Budget set out an ambitious programme of measures to drive economic growth across employment, enterprise, education, and everywhere in the UK, without irresponsibly fuelling inflation. We will look to build on this further at the Autumn Statement; I hope the noble Lord, Lord Desai, will forgive me if I do not pre-empt that today. The Budget package included a landmark childcare offer, and key new policies to ensure the UK business tax system is one of the most comprehensive of the world’s major economies.

In today’s debate we have focused on a number of other important areas driving our future growth. One has been the role of technology, in particular AI, as raised by the noble Baroness, Lady O’Grady, my noble friend Lady Moyo and the right reverend Prelate the Bishop of Oxford. The AI Safety Summit was an important step forward to deploying this crucial technology with the launch of the world’s first AI safety institute, which will help spur international collaboration on the safe development of AI.

The noble Baroness, Lady O’Grady, also called for more effective digital competition policy. That is exactly what the Digital Markets, Competition and Consumers Bill is designed to address, providing new powers to the Digital Markets Unit in the CMA and building on the Online Safety Act, creating a modern regulatory framework for online platforms and tech companies.

My noble friends Lord Altrincham and Lord Trenchard raised the potential of our financial services sector, and the noble Baroness, Lady Drake, and the noble Lord, Lord Davies of Brixton, touched on pension reforms. Both these areas have significant potential to unlock further investment in the UK. The Government will continue to pursue reform at pace, with appropriate safeguards.

The Government’s economic priorities have also driven our approach to delivering on net zero. Since March 2021, the Government have committed a total of £30 billion of domestic investment to the green industrial revolution. Since then, the Government have announced an additional £12 billion for energy efficiency and low-carbon heating to support the work we are doing to reduce the UK’s energy consumption from buildings and industry by 15% by 2030 relative to 2021 levels. We have also announced up to £20 billion for early deployment of carbon capture, utilisation and storage in the UK. In response to the noble Baroness, Lady Liddell, we are currently working with industry on the right quantum of spend within a given period. These are commercial negotiations, the outcomes of which we will announce at the next spending review and future spending reviews, to ensure that the UK remains at the forefront of deploying this technology.

The policies set out in the Net Zero Strategy 2021 and the Net Zero Growth Plan 2023 are expected to mobilise an additional £100 billion of private investment and support 480,000 jobs across the UK. But we know there is more to be done, so we are doubling down on tackling the most significant constraints to our transition —accelerating grid connections, addressing issues with planning and improving auction rounds for renewable power, as well as investing in UK green R&D.

At the same time we are investing in our energy security and making sure that we smooth the transition for households in a pragmatic way. The impacts of Putin’s war in Ukraine have made clear the need for greater energy security in the UK and Europe, which can be secured only by boosting the range of domestic energy supplies that we have available.

Renewable power reached a record share of 48.2% of total generation in the first quarter of 2023. When you include nuclear, low-carbon sources provided over 60% of total generation. In future the UK will be powered by renewables including wind, solar and hydrogen power with carbon capture, usage and storage and new nuclear plants.

The noble Baroness, Lady Whitaker, asked about tidal and wave energy. The Government have invested over £175 million in wave and tidal stream innovation over the last two decades. The Government announced on 8 September that a record 11 tidal-stream contracts have been secured in the latest contract for difference, thanks in large part to a ring-fenced tidal budget. On wave energy, we continue to engage with domestic and European industry, academia and the devolved Governments, including collaborating with Wave Energy Scotland.

[Baroness Whitaker (Lab)]

I am sorry to hold up the Minister in her magnificent tour de force but I asked her a specific question about the consent process consultation. If she does not have the answer to hand on wave energy, would she please write to me?

[Baroness Penn (Con)]

I will be happy to write to the noble Baroness.

We have launched a nuclear revival. The Government invested to become a shareholder in Sizewell C in November 2022 and launched a capital raise process in September this year to bring in new project finance. We have launched Great British Nuclear to drive the delivery of new nuclear technologies beyond Sizewell and to develop the latest small modular reactor technologies, and last month we announced the shortlist of companies to build the new generation of small modular reactors. Beyond the initial focus on delivery, Great British Nuclear will be available to support further nuclear ambitions. It has the statutory backing and resources behind it to deliver against its long-term operational mandate.

Through the nuclear fuel fund we will invest over £35 million, match funded by industry, to develop new domestic fuel production capabilities and to supply gigawatt reactors, SMRs and AMRs. On siting, we are developing a nuclear national policy statement that will cover the policy framework for deploying new nuclear power stations beyond 2025. As an initial step, we plan to consult on our proposed approach for determining new nuclear sites by the end of this year, with our aim to finalise a consultation on the NPS next year and complete parliamentary scrutiny to enable its designation in 2025. We will launch our consultation on alternative routes to market next month and, following our review of responses, deliver a report in 2024. I hope that responds to the questions from both the noble Lord, Lord Ravensdale, and my noble friend Lady Bloomfield, who are both great advocates for the nuclear industry. Perhaps I can write to the noble Lord, Lord Jones, to respond to his specific questions about the two sites that he focused on in his contribution.

However, we also need to recognise that data published by the Climate Change Committee shows that the UK will continue to rely on oil and gas to meet its energy needs even after the UK reaches net zero in 2050. That will include the use of gas for power generation and carbon capture usage and storage. That is why we are investing in the range of domestic energy supplies that we have available, including taking steps to slow the decline in the domestic production of oil and gas, which will reduce our reliance on hostile states and back a thriving industry in the UK that supports 200,000 jobs. It is important to recognise that the UK is a rapidly declining producer of oil and gas, and new oil and gas licences will reduce the fall in UK supply to ensure vital energy security, rather than increasing it above current levels, so that the UK remains on track to meet its net-zero 2050 commitments.

I say to the noble Baroness, Lady Blake of Leeds, that we recognise the unprecedented profits made by oil and gas producers after Russia’s invasion of Ukraine. These profits represent not a return on investment but a windfall as a result of unprovoked war. It is therefore right that we introduced the energy profits levy on those windfall profits, bringing the tax rate on the profits of North Sea oil and gas producers to 75%. By 2027 the levy is expected to raise almost £26 billion, having already generated around £5.9 billion, helping us—as I said earlier—to pay half the typical household’s energy bill between October and June.

We also want to take a fair approach to decarbonising how we heat our homes, which is why we are giving people more time to make the necessary transition to heat pumps. We have increased the boiler upgrade scheme cash grants by 50%, to £7,500, to support consumers who want to make the transition now. It is one of the most generous grants in Europe.

I reassure noble Lords that, in taking into account the changes to the boiler and electric vehicles mandate and the ongoing licensing of domestic oil and gas reserves, we are confident that we can deliver our carbon budgets and capitalise on the opportunities for green growth. So I say to the many noble Lords who raised concerns in this area that we remain completely committed to our existing targets and to meeting net zero by 2050, compatible with the Paris Agreement ambition to limit global warming to 1.5 degrees.

We will continue to listen to and engage with the expertise in this House on climate and nature. I say to my noble friend Lord Lilley that our approach will be informed by evidence, pragmatism and rational debate. Our package of proposals and policies will continue to evolve to adapt to changing circumstances, to utilise technological developments and to address emerging challenges.

But we are in no doubt about the real and present threat that climate change and biodiversity loss represent to our economy and society, and there is no change in our commitment to tackling this challenge. The UK overachieved against its first and second carbon budgets, and the latest projections show that we are on track to meet the third. We are able to quantify the vast majority of carbon savings in the late 2030s, more than a decade away.

Environment and nature are the other side of the coin when it comes to tackling climate change. I reassure the right reverend Prelate the Bishop of Norwich, who spoke so eloquently of his own work on ecology, that not only have this Government done more than any other on the environment and nature—including through the landmark Environment Act—but we remain committed to going further, through our commitment to end the net loss of biodiversity in the UK by 2030. I agree with the noble Baroness, Lady Hoey, that we need to put people and rural communities at the heart of this approach. We will not achieve this transition without the support and action of farmers and land managers.

My noble friend Lady McIntosh asked about the live animal export Bill and whether there is a means to restrict live animal imports from the EU. I say to her that there has never been a significant import trade for slaughter or fattening. For example, since 2019, only 91 cattle, 14 sheep and 20 pigs have been imported for slaughter from mainland Europe—so we do not see a pressing case to take action in this area. On my noble friend’s question about border control points, I reassure her that our new border control point at Sevington, covering the short straits, opens in April. Other border control points will open around the UK, securing our biosecurity with our new border targeting operating model.

A number of noble Lords, including the right reverend Prelate the Bishop of St Edmundsbury and Ipswich, raised concerns about the impact of recent flooding on farmers. The flood recovery framework provides funding for households and businesses affected by severe flooding, and it includes several grants and business rates relief.

I say to the noble Baroness, Lady Ritchie of Downpatrick, that I know that my noble friend Lord Caine spent several hours with her in communities affected by the recent floods. In the absence of the Executive, who could have acted swiftly, the UK Government are making money available to support those affected by floods, through the reallocation of existing funding.

I say to the noble Lord, Lord Whitty, and the noble Duke, the Duke of Wellington, who, among others, raised the reform of water regulation, that we are driving the largest infrastructure investment in water company history—an estimated £60 billion of water company capital investment by 2050—to meet storm overflow discharge reduction plan targets, which were recently expanded to cover all storm overflows in England, including those discharging to coastal and estuarine waters. But I will of course pass on to Defra the proposal from the noble Duke for the future of regulation in this area.

This brings us on to the theme of what is not in the King’s Speech, and to speak to the concerns raised by the noble Baronesses, Lady Sheehan and Lady Bakewell, around the ending of peat in horticulture. It remains our policy that we intend to legislate to restrict and ultimately ban the sale of peat and peat-containing products. We appreciate that there is good support for this from the public and from within Parliament.

I turn to the noble Baroness, Lady Sheehan, and the right reverend Prelate the Bishop of St Albans, who raised the subject of disposable vapes. The Government launched a consultation on smoking and the use of vaping earlier this month. As part of it, the UK Government and the devolved Administrations are considering restrictions on the sale and supply of disposable vapes, including prohibiting the sale of these products due to the environmental impacts that they have.

The noble Lords, Lord Whitty and Lord Livermore, and many others raised the question of employment rights. I say to noble Lords that, over the past year, we have proven our commitment to supporting workers by introducing a number of new employment rights via government hand-out Bills, including a new day one right to request flexible working; a new legal right to request predictable working patterns; additional protections for pregnant women against redundancy; a right to paid leave for employees whose child is receiving neonatal care; and a right for unpaid carers to one week of additional unpaid leave. Action is being taken in that area.

Perhaps related is the question of unpaid Ministers in this House, as raised by my noble friend Lord Forsyth. I and my noble friend the Lord Privy Seal have heard my noble friend Lord Forsyth’s plea and impressed the point at the highest levels. However, as he is well aware, the number of Ministers who are paid is set out in legislation, and to improve the lot of our Ministers who are unpaid we would need to legislate. Unfortunately, there is not currently the appetite to do that.

I turn to the remarks by the noble Lord, Lord Snape, who questioned the inclusion of the Pedicabs (London) Bill in the King’s Speech—