Economic Update

Lord Howell of Guildford Excerpts

Wednesday 19th October 2022 Lords Chamber

[Lord True (Con)]

My Lords, we will continue to go for growth by delivering support for families who need it most—for example, by cutting the tax burden that would have taken place with the national insurance tax. That levy reversal will give 28 million people an average of £330 a year. We will go for growth by launching investment zones, as I said when responding to the most reverend Primate. We will introduce minimum service levels for transport services shortly in Great Britain, to ensure that strike action cannot derail economic growth; I look forward to support from the Liberal Democrats for that legislation. We will accelerate infrastructure projects across the country and have announced over 100 of them for transport and energy. We will also speed up delivery to undertake the complex patchwork of restrictions and EU-derived law.

[Lord Howell of Guildford (Con)]

My Lords, does my noble friend agree that, thinking about the future and the practical situation that we are in, there is quite a lot of sense in reviewing the energy cap again in April 2023, provided that it does not push up the CPI, because every time that happens it increases government expenditure elsewhere? There is a growing realisation that, next year, energy prices internationally—oil and gas—need not rise nearly as fast as they have in the past. There are some signs of fall already. Therefore, if we can organise effectively an international co-operation with other major consumer countries in persuading the powers-that-be in the production world to increase oil and gas production, including America, OPEC and other countries, the difficulties of Russian withdrawal can be overcome, and we can see a much more favourable inflation rate. That in turn will begin to unwind all these worries about benefits matched to inflation and demands for wage costs well above 5%.

[Lord True (Con)]

My noble friend, with his immense experience in the energy sector, has been something of a voice crying in the wilderness on energy policy over decades under different Governments. His point about volatility is critical and is one of the reasons why we must review the nature of support going forward. Obviously, we will need to talk, and are talking, to other energy producers. We have had a very sharp increase. There have been significant fluctuations. We introduced an energy profits levy, an additional 25% tax on the profits of oil and gas companies which, listening to people on the opposite Benches, you would not know had even happened. That is going forward and is not a one-off. It will raise £7 billion this financial year and £10 billion in the next. We are looking to iron out the contracts to help renewable energy industries and there is a package that I hope will come forward before too long.