Energy Costs

Lord McNally Excerpts

Thursday 6th January 2022 Lords Chamber

[Lord McNally (LD)]

My Lords, when I was in my sixth-form debating society, we would occasionally have a debate entitled “Something must be done.” That mood was well captured in yesterday’s Daily Telegraph “Chopper Politics” column, written by its chief political correspondent, Christopher Hope. He said: “Everyone can see the cost-of-living crisis about to hit millions of British households in the spring. Oddly though, the Prime Minister appears to be all at sea about how to deal with it.” The validity of that statement is beyond doubt and the Question of the noble Baroness, Lady McIntosh, for which I am grateful, goes to the heart of the impending crisis, with its impact on pensioners and those on low incomes.

We have just had a contribution from the noble Lord, Lord Lilley, that goes to the heart of this dilemma. We have on the one hand his “stop the world, I want to get off” approach against the commitments that the Government made only recently in Glasgow. It will be interesting to see how the Minister responds to both challenges.

There is no shortage of suggestions for measures to deal with the matter. We heard some in great detail from the noble Baroness, Lady McIntosh, and the Labour Party and a significant number of Conservative Back-Benchers favour a significant cut in VAT. The Prime Minister immediately stamped on that idea because it would help

“a lot of people who perhaps don’t need support”

with rising living costs. That might well be true, but it will not feel that way to voters in Uxbridge, Surrey or where the noble Lord, Lord Lilley, used to represent in Hertfordshire when they open their energy bills in the spring.

So whatever the response and whenever it comes, the Government must give the country clear direction, not only on short-term measures but on a clear and sustainable national energy policy. That would be difficult for a Prime Minister who seems to work only to a 24-hour rolling news cycle.

The initiative announced by my right honourable friend Ed Davey for a Robin Hood tax on the gas and oil companies would enable the Government to help the vulnerable in immediate need and provide encouragement and resources to help with home insulation and other energy-saving measures in the long term. It is that combination of long-term planning for the future and immediate help to the most vulnerable that is most likely to result in parliamentary and public support for the difficult choices that the Government are going to have to make.

I presume that we have all received the excellent brief for this debate from Energy UK setting out the facts about the gas price crisis and the fragility of the UK energy market. That brief asks two pertinent questions. When will the Government launch their fairness and affordability call for evidence, which was expected in April 2021, on the options for energy levies and obligations to help to rebalance electricity and gas prices, and support green choices? What estimates have BEIS and HM Treasury made of the implications of the high wholesale gas costs for the whole economy and inflationary pressures on business and households? Perhaps the Minister could address those questions in his reply.

After two years of Covid, we are moving into even more uncertain times in the economy. Such times need a Government who are strong in leadership and clear in policies. I fear that at the moment we have neither.