Thursday 3 February 2022
Arrangement of Business
My Lords, Members are encouraged to leave some distance between themselves and others and to wear a face covering when not speaking.
Cost of Living
Motion to Take Note
That the Grand Committee takes note of the cost of living, and in particular (1) the rising cost of household energy, and (2) the role of the consumer protection regulatory regime in energy markets.
My Lords, I obviously had great prescience in going for this debate on this day. Unfortunately, it means that Ofgem and the Chancellor have stolen some of my thunder and limelight. I actually had my coat on to come here when the Chancellor was speaking, but I heard most of what he said.
I propose to focus largely on the energy market failure, but let us start by putting it into broader context. Higher gas prices are coming, while shop price inflation rates doubled in the last month, rents are at their highest level for more than a dozen years in real terms, house prices for first-time buyers are at their highest level ever, food prices are rising in the post-Brexit situation and general price inflation is at its highest for about 30 years. That means unprecedented numbers of people are taking out loans, and incomes are not keeping pace. Wages, benefits and pensions are all falling in real terms in the face of this inflation, and all taxpayers are about to be hit by the surcharge on national insurance. As a result of these costs and pressures, according to Which?, more than 2.5 million households in the month of January alone defaulted on at least one regular payment—rent, mortgage, energy, loans or credit cards—placing those families in financial difficulty and often under serious mental stress.
That is the background, but the energy price rises are the most spectacular feature. Another enormous hike in the energy price cap of nearly £700 was announced today. This is before we all have to face up to the very substantial cost of transitioning away from gas heating entirely, and the need for a just transition to a non-fossil-fuel-based home heating system.
I will return to that longer-term issue in a minute, if I have time, but the Government and Parliament need to recognise the stress and hardship that all of this is causing to vulnerable individuals and households, particularly to low-income families. As I understand it from the Chancellor’s Statement an hour or so ago, the Government recognise that the hike in the energy cap is a problem. The Minister will correct me if I am wrong, but the Chancellor intends to offer an offset to the potential £700 rise in household energy bills by giving all bill payers an undifferentiated £200 each, unrelated to household income, energy bills or property conditions. This is to be delivered via a sort of indirect loan to suppliers, which then have to repay the Government. The costs of this will eventually be passed back to consumers, thus adding to potential household cost pressures and indebtedness down the line. In addition, over and above what was rumoured, the Chancellor is announcing a rebate to lower council tax bills.
There are aspects of what the Chancellor said that I welcome. I do not think he has done it in the best way, but he has recognised some of the problems. However, it still deals with only half of the potential impact on households. The £200 is not much of an offset on £700, and, frankly, using council tax is an incredibly bureaucratic and inefficient way of getting help to the most desperate families.
Yet the Government did not need to invent new mechanisms. Fuel poverty groups and, indeed, the Labour Party have proposed a number of immediately available interventions that the Chancellor could have used—for example, post-Brexit freedoms to remove VAT, temporarily at least, from domestic energy prices. He rejected that and I can in part understand the reasons; nevertheless, that was an immediate and beneficial option. He could have expanded the warm home discount to lower-income families. There is a reference to that in the Chancellor’s Statement, and I should be grateful if the Minister could spell out exactly what it means. The Chancellor could have extended winter fuel payments to a further 2.4 million vulnerable households. He did not do that. He could have offered a one-off rebate for low-income households this winter, which could have helped at least 4 million of those households. He could have given more help on rapid repayments of utility arrears; I am not whether his Statement covers that. Of course, he could have moved on the reintroduction by energy suppliers of a social tariff for the long-term benefit of the most vulnerable households—a move I strongly advocate.
In addition, we and campaigners have called for a return to an England-wide programme of effective household insulation and energy-efficiency measures. Over the medium term, that would reduce energy consumption and hence costs to households. There was some reference in the Chancellor’s Statement to that, but it looks pretty miniscule to me, at first sight.
We need also to look at the underlying reasons for and effects of the price rise, and the role of the Government and the regulator in consumer energy prices. Of course, the immediate cause of the increases has been the indirect effects of the dramatic rise in world gas prices. But, frankly, the British economy of all economies ought to have been more resilient and insulated from the effects of Russians playing politics and the Qataris controlling the shipment of LNG. Storage and flexibility measures have not been adopted or invested in. That is partly due to a failure by Ofgem to provide suppliers and the system with the means to do so, but Ofgem has also failed in its role as regulator on behalf of consumers, particularly vulnerable consumers.
About three years ago, I chaired a group convened by Energy UK, the industry’s trade body, to identify means through which to provide a better service and more appropriate pricing structures for vulnerable consumers. To be fair, a lot of larger energy companies have adopted some of those recommendations but there is much more to be done. That has been at the behest of the companies themselves, not Ofgem. Over the past decade, Ofgem has regarded the main means of improving service to consumers as being an increase in competition. That helps significantly in most circumstances, but the way in which it has been done has actually caused more problems than it resolved for consumers, the Government and the regulator.
Obviously, the old oligopoly of the big six was rightly challenged but the number and variety of challenger companies that were nodded through and licensed by Ofgem, thereby relieving some of the obligations regarding poorer consumers, meant that, over a period of about five or six years, the oligopoly moved to becoming a cut-throat market of some 70-plus companies, many of which were new and untested. The sustainability of many of the rest was also suspect. It is clear that in this vital part of its obligations, Ofgem just allowed the establishment of dozens of novice companies through the licensing system, with totally inadequate financial resilience tests, superficial checks—if any—of the management structure and investment sources, and no stipulations on customer service in general or in particular in relation to vulnerable and low-income groups.
Citizens Advice has provided us with a litany of those failures and Ofgem’s failure to meet even the basic requirements. Yet in recent years, there has been only one Ofgem formal customer service investigation. It made no use of its powers to stop a supplier taking on customers when there were customer service concerns about the company. In the four years before the gas price crisis, the number of people working at Ofgem on consumer service had fallen by a quarter.
As Citizens Advice says:
“Regulatory failings led to a culture of non-compliance”
among many of these new companies and the rush of company failures has duly followed, with dire consequences and uncertainties for consumers and messy transfers of customers to the larger companies, increasing the pressure on consumers and the recipient companies.
It is true that early last year Ofgem introduced a new supplier monitoring and checking system, yet only one of the 20-plus companies that failed last year had any sort of customer continuity plan in place to protect their consumers in the event of financial collapse. That is a serious failure by the regulator and one which the Government and the regulator need to address to decide the size of the market we can cope with. The big six was clearly wrong but a market of 70 or 80 small companies, poorly based, is also not the right answer.
The other thing is that, if we have not been able to cope with a traditional gas price rise and preserve and increase customer service during that period without hitting consumers and without the Government having now to bail them out through the interventions the Chancellor announced today, then there is something seriously wrong in the regulatory system. I have it in mind that we will have to cope shortly with a much bigger issue—the transition of the 80% plus of our households which are on gas supply at the moment to as-yet-unknown forms of alternative low-carbon or no-carbon fuels. That is a massive operation, and it needs planning now. Yet, we still need key decisions from the Government and industry, and key questions are likely to be asked of the regulator.
That is going to be a massive transformation. The last time we did it, when we replaced town gas with North Sea gas, it was organised in every household that used gas by employees of a nationalised corporation —most of whom were members of my union—who went into every household. That took time and it needed planning, but it was a simple structure. We no longer have those simple structures. We no longer have the clear strategic decisions, and yet we are going to place on top of this system, rightly, in order to meet our carbon obligations, a whole new system of heating for pretty well four out of five households in the land, and many businesses and offices as well.
Ofgem and the department are going to face a much bigger problem than a global gas price rise. They are right to face it because we need to change our whole heating system, but we need to know how we are going to do it. We need to know that consumers’ interests will be protected in doing it. We need to know who is going to deliver it. We need to know some basics, such as what kind of fuel we are going to use and whether there be one system in different parts of the country. The Minister will know that I have asked questions on this before, but we still have no clear answers. If we postpone decisions on how we will heat our buildings in future, the chaos we are facing in relation to one big world problem is going to be compounded as we try to implement a change to meet our carbon objectives.
I am very worried about the immediate situation, and thousands of households are extremely worried and unable to meet the costs implied, even allowing for the Chancellor’s claim that he is going to cover half of the system—in a way that I do not regard as optimal. But even if he does that, there will be cost increases which thousands of households will be unable to meet.
The Government face a serious economic crisis in the form of the energy price, and a serious social crisis in terms of the impact on families and households. There is also a serious strategic and political crisis, in that we have to change the system of regulating this market and make clear to the industry and consumers the way we are going. I hope the Minister can give a few answers today, and that the Government as a whole can address these problems in the coming weeks.
My Lords, I declare an interest in energy price-related issues, as in the register.
My brief contribution to this superbly timed debate—it really is perfectly timed—will be more about preventing the reoccurrence of this problem, which otherwise will hit us again and again, than the immediate amelioration which is certainly needed. No doubt we shall hear from the Government about what is proposed to prevent widespread suffering and address the real fear in many households, and disruption throughout key parts of industry, when energy prices go super-volatile as they are doing now.
There is a simple—perhaps over-simple—one-word answer to the question of what we can do to prevent recurrence: back-up. We are in the midst of a gigantic energy transformation which is the biggest for over 200 or 300 years, since the Industrial Revolution. It is a fundamental reorganisation of our entire energy system into a new pattern. This is huge, and no system—certainly not this one—will work without the full availability of fall-back energy supplies, 24/7, which can kick in when the inevitable disruptions, breakdowns and crises occur. It does not matter whether we talk about green energy or traditional fossil fuels: there will be, as there has been in the past, occasional and sometimes devastating interruptions, and that is why we must have full back-up facilities in place. Do we have them?
Look at the scene. We have ruled out coal. Obviously, that is the right thing to do but frankly, I am afraid that it will not make any difference to rising emissions worldwide or to climate control, because of course the main coal emitters are roaring ahead. There are 8,200 coal-fired stations in the world, all puffing fumes into the air, and several more are being built despite the Glasgow undertakings that they would not be. So, coal will continue to drive emissions upward, but at least we can demonstrate our good intent by closing it down. So that is that—although I note, slightly cynically, that to keep the lights on in Glasgow and the conference going, they had to open up a couple of coal-fired plants.
Investment in more gas is being strongly discouraged. It is an amazing thought that years and years ago, when this country, or the Government, had the misfortune of having me as their Energy Secretary, 1% of our electricity came from gas, and even that was resented by Sir Denis Rooke and others. Now it is running at roughly 43%, although I note that last week 55% of our electricity was coming from gas. That is dangerously high. I remember when Helmut Schmidt told Mrs Thatcher that Germany was going to rely on Russia for a quarter of its gas—just a quarter—she said, “Helmut, you’re crazy: this is going to lead to terrible trouble”. He replied, “No, don’t worry, communism is a reliable business partner and it will all be all right.” It was not all right.
Obviously, we are discouraging pensions from investing in oil and trying to run down our international oil companies, so we are handing the ball back to OPEC there, and we will feel the rough edge of that as petrol and oil prices go whizzing up.
We had high hopes in my time of building a reliable and solid back-up system through modern nuclear power. That was the plan. We aimed for nine PWRs and only got one built, but the world moved on and oil and gas were cheap, so we managed to get by with the one at Sizewell B. Now we are trying to revive our nuclear replacement programme and I am not at all happy about where we are going. It seems that we are at a Y-fork in the road in the development of civil nuclear: between large-scale repeat such as Hinkley or maybe like Sizewell C, and going for SMRs which, according to Rolls-Royce, could be produced at about the same time.
That is a big choice and I hope that the Government get it right because, if they do not, we will end up with a lot of further disappointments and difficulties and a lack of the back-up that we need. In particular, I have to note that getting out of large-scale nuclear building and attracting private capital, which we will never get into the big-scale stuff, even with the proposed reforms in financing systems, is made 10 times more difficult by the fact that, of course, we are deeply involved with the Chinese. Somehow we will have to get out of the Chinese involvement in Sizewell C, Hinkley Point and other projects, and do that smoothly, if we are not to bring the whole house of cards down.
I am afraid that what I have said is slightly gloomy, but if people just hang on to the word “back-up” they will understand that we can save ourselves from the horrible volatility of prices. Behind the volatility, of course, comes the prospect of actual outages. We must have a resilient and diverse system. That is the big lesson, which I am not sure has yet been learned.
My Lords, I congratulate the noble Lord, Lord Whitty, on his prescience in the timing of this debate. Barring a Russian incursion into Ukraine or more wine o’clock Downing Street shenanigans, inflation is very much at the top of today’s news. It is not good news, as has already been spelled out: we are in very difficult waters at the moment and things show all the signs, in the coming period, of getting worse. With inflation now at a 30-year high and a record increase in energy bills expected from April, poorer households are under particular pressure, as essentials such as energy and food form a larger proportion of their shopping basket than discretionary items. We also have the increase in national insurance to come, adding to the pressure on jobs and living standards. I believe that to be a bad idea, certainly at this time in the cycle of our economy.
I recognise that the Minister is very much bound by the Statement on energy made by the Chancellor today. These new measures, and the inclusion of a government-backed £200 discount in bills by offering loans to suppliers, as well as the council tax rebate of £150 for those in lower-cost housing, are welcome and a recognition by the Government that we have a big problem. They are welcome, but they will not offset the other measures that we are going to experience with the Ofgem price cap announcement, which could catapult the average home bill to £2,000 from April. That is a lot of money for many households.
I had hopes—there is no surprise here, with my background—that rising real wages would help to ease the position of working people. Indeed, labour shortages and union action in a number of industries have secured impressive pay rises for some. For example, I read in the paper the other day that the GMB has secured a very decent rise for binmen in Eastbourne, while Unite has secured good settlements to disputes in South Yorkshire, Mercedes Benz and Nottingham. But this is not the general picture: the majority of workers face a fall in real pay and the heroes of the public and related services, who have done so much in the current pandemic, will be poorer at the end of it than they were at the beginning, despite being showered with thanks and claps by a grateful nation.
Worryingly, firms and employees do not expect the squeeze to end soon; we will have to live with this for a while. So what can we do about it? Some things are being done about it and I have mentioned my welcome for those. I hope that the Minister can undertake at some stage to revisit two other areas to help the low paid and hard pressed. These are raising the national living wage more than it has just been raised. Wages are too low in many sections of our society and raising them will be crucial to the success of any levelling-up agenda. If we do not raise people’s spending power in the weaker regions, we will not get very far with the levelling-up agenda. The other thing that I hope will be revisited is the premature withdrawal of the £20 uplift to universal credit, which helped many get through lockdown. That and the furlough scheme were two massive supports for the economy and for the hardest hit at a time when they were most needed and I unapologetically welcomed them at the time.
More generally, will the Government not make the George Osborne mistake? In the last period when we had recessionary pressures after the financial crash, the then Government tackled our indebtedness with growth-killing policies of austerity. It was a disaster from which we are still reeling. We should have given growth a better chance than was done at the time and I hope that the orthodoxy of that time has now passed. This time, the economy should be allowed to expand. The Government should be looking at other areas for their revenue. Lower capital gains tax payments are an obvious area for attention, as are windfall taxes. Can the Minister encourage us today by saying that those things are still on the table and are being considered?
My Lords, I remind noble Lords that I am a vice-president of the National Energy Action advisory board. I join others in extending thanks to the noble Lord, Lord Whitty, for this timely debate.
The rise in energy costs announced this morning and in the cost of living generally is now being described as a pending cost of living catastrophe. Unless the Government change course, even with this morning’s announcement, I fear that that is what it is likely to be. It most certainly is for those on low incomes, who face rising inflation, likely to be 7% in April, this massive hike in energy prices, rising taxation—not least national insurance, council tax and the freezing of thresholds—and rising interest rates, increased to 0.5% about two hours ago.
The StepChange Debt Charity has estimated that a third of households are now having difficulty meeting their bills and many of them are now borrowing to cover their basic needs. There is now a real risk of a national debt crisis. One partial solution is to restore the cut in universal credit—that seems essential—but there are others.
I hope that the Government will act on the need to reflect the true rise in the cost of living for those on low incomes. The CPI index does not reflect the rising cost of basic food products or the cutback in the value range of supermarket products. Perhaps the supermarkets might look at what they can do to keep prices down. There should be an index that does not include car costs or consumer goods, so I am glad that the ONS will be producing an inflation index based on tracking basic food prices. I hope that the Minister will confirm that the Government will want to use it.
We heard just now that the energy cap has been increased this morning by 54%. It is estimated that a quarter of UK households will be paying more than 10% of their budgets on energy in April, but many of the poorest households we will be paying much more than 10%. For that reason, it is welcome that the Government are introducing some further financial support. It is, however, inadequate. As the noble Lord, Lord Whitty, pointed out, it is only half the increase and other measures need to be taken to support people on low incomes. Loans are being used when it is estimated that gas prices are likely to stay twice as high as they have been until at least 2025.
The Government have a responsibility to help people on low incomes now, not to keep their costs high so that tax cuts can be delivered nearer the next election, which is rumoured to be the Government’s intention. I very much hope that the Minister will confirm that that is not the Government’s intention and that the people who need help now will be helped now.
The council tax discount at bands A to D is £150, but it will not be sufficient to meet the 54% increase in the energy price cap. I have concluded that we need a windfall tax on oil and gas companies. The announcement this morning of Shell’s enormous profits points to such a Robin Hood windfall tax being justified. As I understand it, Shell has announced $6.4 billion in profits over its fourth quarter. The priority must surely be to cut the heating bills of vulnerable and low-income households, perhaps by doubling the warm homes discount and expanding it to all those on universal credit. This should be funded through a one-off Robin Hood tax on the record profits of oil and gas producers and traders.
We know that the lowest-income households spend twice as much on food and housing as do better-off households, so the current crisis hits the poorer more than it does the better off. The national insurance rise should be abandoned. The public now see it as the equivalent of the cost of unused PPE and fraud in the business support system. Those two things are the same as the projected income from the national insurance rise and I think that the NI rise really cannot be justified now. The Government should use general taxation instead, as many commentators suggest.
Mention was made by the noble Lord, Lord Monks, of the Levelling Up White Paper, but you do not level up poorer parts of the country by increasing so substantially the amount of tax that people who live there have to pay. The noble Lord, Lord Howell of Guildford, reminded us of the need for back-up. We need that and more. We need to relaunch the green homes grant scheme, we need more local networks for renewable energy sources, we need greater investment again in insulation and we need much more research on how to store renewable energy. In the medium to longer term, those should be the Government’s priorities.
My Lords, I am delighted to follow the noble Lord. I declare my interest as president of the advisory board of National Energy Action. I congratulate the noble Lord, Lord Whitty, on securing the debate, but especially on securing it today; it could not have been more timely. I entirely endorse his comments about the role of the regulator, which raises a lot of questions that I will refer to in my short contribution.
I approach this primarily from the perspective of rural areas, such as North Yorkshire, Northumbria, Cumbria, County Durham and many isolated and deeply rural parts of England especially. Residents of rural areas have been particularly hard hit during the energy crisis since wholesale gas prices increased in October. I do not think that this has been sufficiently addressed by my noble friend the Minister, who I welcome to his place today, his department or the Government more generally.
Those who live off the grid in rural areas are not currently covered by the price cap. They have been left to rely on oil, LPG and solid fuels, which are not and will not be covered by the cap. My first question to my noble friend is: what assessment have he and the department made of the impact of rising energy costs on rural dwellers in general?
I am sure that my noble friend and the Committee will accept that there are pockets of deprivation in rural areas, which are often overlooked. There is also the challenge of an increasingly elderly population living in rural areas on fixed incomes, who are particularly challenged by the increasing cost of food, to which the noble Lord, Lord Whitty, referred, and the cost of heating and electricity, which is before us this afternoon. Like others on low income, this winter they are frequently faced with the choice of whether to heat their homes or eat.
There are currently 4.5 million people in fuel poverty and it is generally understood that, come April, another 1.5 million may be pushed into poverty. National Energy Action has costed a number of its proposals, which I ask my noble friend urgently to consider. For what reason could BEIS not adopt those mentioned by the NEA? One is a one-off rebate, or crisis income support, to cover the 4 million low-income households before April. Another is to expand the GB-wide warm home discount, to which the noble Lord, Lord Shipley, referred, so that everyone currently eligible will receive the support that they deserve. Another is to provide support for an additional 2.4 million low-income working-age households across the UK by expanding the winter fuel payment. Another is to accelerate the repayment of utility debts across the UK and, by next winter, to supplement these measures with deeper price protection or a new mandatory social tariff to help those in the cohort of low-income energy users to make their energy more affordable.
The noble Lord, Lord Shipley, and others have referred to a windfall to the Treasury in addition to the price increases since October, yielding an estimated £100 million extra in VAT through domestic electricity and gas bills. Also, the doubling of households bills from April to £2,000, as was referred to, will apparently yield an extra £77 million for the Treasury. There is also the increase in respect of UK ETS permits, yielding an additional £3 billion.
The Treasury, for some reason, has not sought immediately to recover the £4.3 billion in fraudulent Covid loans identified so accurately by my noble friend Lord Agnew. I pay tribute to his work in the Treasury in this regard. I understand that up to £30 billion more of such money has been identified across all departments. The noble Baroness, Lady Crawley, and I served at the same time in the European Parliament, when the level of EU fraud was a source of some embarrassment. It was an appalling disgrace, as we were told by our British colleagues in the Westminster Parliament. It was, but so is this national ongoing fraud. The money must be recovered; it would add to the funds available to the Treasury in order to finance what National Energy Action is asking it to do.
Also, climate change presents greater challenges. We have seen three catastrophic power failures already, not helped by the fact that 30% of energy is lost through overhead line transmission. That has to be addressed.
Finally, I turn to the role of the regulator. Clearly, competition is not working in this sector as it was intended. Recent failures of energy companies mean that the cost has been passed on to the customer. An additional 25% of our energy bills is going on green levies. Why is the energy sector alone allowed to fund its increases through the customer, whereas others such as the water sector have to go to the market? I urge my noble friend to address these issues as urgently as he can.
My Lords, I applaud the timing and the work of my noble friend Lord Whitty in his chairing of the Commission for Customers in Vulnerable Circumstances and much more. We have also worked together as vice-presidents of the Chartered Trading Standards Institute.
April can be a cruel month, as TS Eliot might have put it, and it is certainly looking that way for millions of British households. Emerging from the biggest health crisis in a century, many UK families will be facing a painful cost of living crisis this spring, with energy price increases, rising inflation, more taxation promised and the burden of Brexit becoming more evident every day. Many British household budgets will be stretched to the limit and, in the poorest households, where fuel poverty is already a fact of life, there will be the realisation that there is nothing left to stretch.
According to the ONS’s latest stats, growth in income of the poorest fifth of people has not kept up with inflation, which has led to the median income of the poorest fifth falling by an average of 3.8% between 2017 and 2020. Meanwhile, income for the richest fifth continued to steadily grow between 2017 and 2020. This means that income inequality increased substantially over this period—before Covid, the soaring cost of energy or the increase in inflation. We know that households on low incomes spend proportionately more than richer households on essentials such as housing costs, food and transport, as noble Lords have said. According again to the ONS, households in the lowest decile spent 54% of their total weekly expenditure on these things, compared with 42% in the highest-income decile.
It is against this architecture of inequality that we have to view the alarming energy situation post April. Households in Britain could soon be spending more of their money on energy than any previous generation, including those who lived through the oil shocks of the 1970s and 1980s—some of us are old enough to remember those. Of course, these aggregate numbers do not represent the experience of specific households, particularly those in very low income and low expenditure households. They may see their energy burden rise to 13% of total spend or above.
As we know, this crisis in living costs comes on the back of the loss of the £20 a week Covid welfare boost, as my noble friend Lord Monks said, which finished in September. Some people are already not putting on their heating through this winter, and the 14% of people on absolute low income in this country are finding it very difficult to keep themselves and their children warm right now. As the noble Baroness, Lady McIntosh, said, eat or heat is the dilemma. At the start of the pandemic, the Government rightly launched a project called Everyone In, which took all the homeless off the streets and into accommodation. This cost-of-living crisis needs the same urgent focus for those on low incomes: “Get Everyone Warm”.
The mitigating measures announced by the Chancellor today may take the edge off some bills, and we should recognise that, but they are ill thought out, too little and too late. The Labour Party has called for VAT on energy to be cut, and that should have happened. A one-off windfall tax, as the noble Lord, Lord Shipley, has called for, also should have happened. Paul Johnson of the IFS has suggested a one-off uprating in benefit payments this year—quite right too. While I understand that the warm home discount will finally be increased, and that is welcome, I ask the Minister: what is happening to the household support fund available to local government beyond 2022?
My noble friend Lord Whitty knows better than most that the underlying problems of a badly regulated energy market need fixing urgently, and he has set out a way forward today. There is no real resilience of suppliers, and customer protection by Ofgem’s own standards is often completely ignored by companies. The market is a shambles; meanwhile, many British children and pensioners shiver in their cold homes. It is shameful, and the Government’s response falls short of what is needed in the medium and long term.
I, too, thank the noble Lord, Lord Whitty, for securing today’s debate. It is easy to say that it is timely: it has almost been too timely, as announcements have been coming thick and fast and we have all been hastily rewriting. The announcements about the energy price cap and the Chancellor’s response have meant that we are focusing largely on energy, but we are all aware that the general cost of living crisis is the context in which this debate sits. I particularly note the Bank of England’s prediction today that inflation will reach 7%; it has been some time since we have seen that.
As the noble Lord, Lord Whitty, said, both medium and long-term issues come into play here. I want to use most of my time to speak about a longer-term issue—energy efficiency. Research by Carbon Brief has shown that a series of cuts to energy efficiency measures has meant that today’s bills are around £2.5 billion higher than they might otherwise have been. The number of homes getting their lofts insulated fell by 92%, and cavity wall insulation fitting dropped by 74% when the grants were cut. A year before it was due to be introduced, the zero-carbon homes standard was scrapped. As a result, around 1 million new homes have been built since then with lower energy efficiency standards, meaning higher energy bills for occupants and owners facing expensive retrofitting.
The decisions to scrap those schemes were made because gas prices were high and energy bills growing. However, the decisions were short-sighted and there is a lesson for us to learn now because the answer to high gas prices is not more gas, as the evidence clearly shows; it is to double down on renewable energy sources and home efficiency improvements. If we do not act now, the peaks and troughs of fossil fuel prices will continue and we will be in this position over and over again.
State intervention is needed to deal with the problem of an inherently energy-inefficient housing stock in this country. I shall explain why. By their nature, many energy efficiency measures require up-front cash and often take some years to pay back. For those in the private rented sector, neither landlords nor tenants have any incentive to invest in those measures, even assuming that they can afford it. In the social rented sector, a lot of good work is done by local authorities and housing associations to reduce energy costs for their tenants, who quite often lack their own financial resources. But those bodies are themselves increasingly strapped for cash and unable to finance the energy efficiency measures that they know are required.
However, the majority of us are owner-occupiers. In a country with high levels of home ownership and a flexible job market, houses are no longer seen as places where people live for a long time. Houses are not just homes nowadays; they are property and often the main or only financial asset. Putting scarce cash resources into measures that take years to pay back and do not really add to the value of the house does not look like an attractive option for many people. Take the example of a heat pump, which can cost between £6,000 and £8,000. If we are to improve the energy efficiency of our national housing stock, government intervention is required. I remind the Committee that around 22% of UK carbon emissions comes from domestic energy consumption, so there is a significant contribution to net zero to be made.
As other noble Lords have said, Shell announced today that it made £17 billion profit in the past year. I agree with all those who said that it is beyond time that we thought about—indeed, introduced—a windfall tax. Like the noble Baroness, Lady McIntosh, I pondered on the extra VAT that has accrued to the Treasury, which ought to be available to help people. The cost-of-living increases and today’s announcements on energy will hit everyone but the impact on the poorest is absolutely devastating. The Chancellor’s package is not sufficiently aimed at helping them. The council tax rebate is an untargeted, blunt instrument. A scheme that helps people this year but has to be paid back in future years is just a gamble on gas prices falling. If they do not, at best the pain is postponed but it could get considerably worse.
It seems to me that by far the easiest way to target help to the poorest would be to reintroduce the £20 a week universal credit uplift. There is a strong case for having a look at the grant situation. I am sure that other noble Lords received a briefing from Marie Curie, which set out the difficulty that terminally ill people are having in receiving grants. That is a desperate situation; you do not get more vulnerable than people who are dying at home and are cold because they cannot access things—so we need to look at that.
A coalition of 27 charities has written to the Government urging them to respond to the energy crisis with measures that create a green, fair and affordable energy system, and I am afraid that the Chancellor’s response does not do any of that today. It does not help the worst off and does not provide any means of longer-term security through energy efficiency.
My Lords, I, too, would like to offer my thanks to my noble friend Lord Whitty for initiating this important debate. I could not help smiling when he referred to the conversion to gas boilers. I remember it well: the sheer delight of coming down in the morning and not having to rake the ashes out of the grate and start the coal fire again, because it had been replaced by a gas fire.
What I would say about the current situation is that it is a very dynamic one. There is not going to be one system in the future, by any means, but one thing we do know is that gas is going to be with us for the next 20 to 30 years. That is a reality, and one that lots of people do not like to face, including some of those sitting alongside me. No doubt I will be chastised and told that it is not true and we can do it all with renewable energy, but that is a very debatable assessment of the situation.
When I say that it is a dynamic situation, well, carbon capture and storage is there and it needs to be refined, but it is certainly something I believe will happen. However, there is a supreme irony in the current situation, and this Government have to take the blame. We decided that fracking was not acceptable any longer, and nobody seemed to worry about the fact that they are still fracking in the USA and Qatar. Could the noble Baroness, Lady Bennett, tell us why it is acceptable to ship liquid natural gas all the way from the USA and Qatar, then deliquefy it and use it? We do not want fracking in this country, but we do not care how it happens elsewhere. We could have had a safe, reliable system and created thousands of jobs; it was ready and there, but a hysteria was created about it. We were told that we had to stop drilling, because we had 0.5 on the Richter scale. If a lorry rumbles past your house, it would be more than that. It was an absolutely ridiculous decision to make. I can understand the political pressures, and why it was made, but it is a situation that we are paying for and will continue to pay for—and it will not do anything about improving the environment.
Of course I believe in renewable energy. I was a bit puzzled when the noble Baroness, Lady Scott of Needham Market, said that nobody was going to invest in their houses. Plenty of people around me are investing in solar panels, even though the subsidy has gone, and there is a good return on them. She is shaking her head, but you only have to look at roofs if you do not believe that. I want to make a plea, when we talk about renewable energy and nuclear and so on, or hydrogen, that we have a holistic analysis and not the idea that there is just going to be one solution.
The noble Lord, Lord Howell, referred to small-scale medium reactors, and it looks like a promising area—who knows? There is hydrogen as well. I also think that there are some possibilities, without wanting to seem patronising to people, and ways in which you can save energy. You can save by the way you cook, and by wasting less food, which makes an important contribution. Trying to educate people in their lifestyle is important, and the Government should be thinking about that, in my view.
Of course I believe in things such as the green homes scheme. I am puzzled why that has been abandoned because that would have a long-lasting effect. I also agree with noble Lords who have referred to things such as the windfall tax. I am looking forward to the Minister being able to address all these issues. There is a real challenge—and not just for the Government—in how we analyse the best way to help people in the future when we know the cost of living is rising. Is the only solution to increase benefits? Part of the solution, in my view, is getting people back into employment. Not only is that better for them individually; it sets an example to their families, so that another generation of young people do not feel that the only income coming into the family is benefits.
I hope that people will recognise that I am trying to make a serious contribution on things such as fracking and the need for a more holistic analysis.
My Lords, I shall try not to turn this into the Oxford Union but the noble Lord, Lord Young of Norwood Green, put some direct questions to me and, in responding to the debate, I will also provide some answers to those. His comments about lifestyle change are really quite insulting to the people who are struggling so hard that food banks are having to make up parcels of no-cook food because they simply cannot afford to cook. The noble Lord said that some people around him were investing in their homes. We are talking about the cost-of-living crisis. There are very large communities where very few people have any money at all to maintain their homes, let alone invest in them.
However, I will agree with the noble Lord that we cannot do it all with renewables. Indeed, the powerful and informative speech from the noble Baroness, Lady Scott of Needham Market, covered that very well. The cleanest, greenest energy is the energy we do not have to use. The quality of our housing stock is disastrous, and saving energy is the other side of using renewables.
I will go back to where I was planning to start, which is by thanking the noble Lord, Lord Whitty, for securing this debate and, as many others have, congratulating him on his extremely good timing. What we are seeing today is pretty well the rest of the country following where the Green Party has led. Back in the autumn of 2021, we called for a payment of £320 to every household—a winter fuel payment to help people through the winter. Voilà: today we have a payment to most households of £350.
As the noble Lord said, a lot of this, effectively, is expected to be paid back. It is a debt. Households enormously laden with debt already are using debt to pay their grocery bills because they simply do not have the money, and the Government are effectively putting more debt on them. There is a very large question to be asked about the process.
I referred to what we were saying in autumn 2021, when we called for a temporary cut in VAT on domestic energy bills. It may have been a Boris Johnson promise in 2018, and Her Majesty’s Opposition, I believe, are now calling for that. Also in autumn 2021, we called for a windfall tax on oil and gas companies, which I understand is also now Labour policy. As the noble Baroness, Lady Scott, made very clear, it is obviously the time for that windfall tax on oil and gas companies.
Yesterday’s Financial Times had the headline: “Big Oil groups regain swagger with largest profits in years”. In the climate emergency the last thing we need is fossil fuel companies swaggering around the world, using their windfall profits to seek out even more oil and gas fields, building the carbon bubble even further. It is a huge threat to our financial security as well as our fragile, overheated planet. Returning to what the noble Lord, Lord Young, said about fracking, creating a new industry that you are going to have to immediately shut down makes no sense at all—and no, we should not be shipping LNG, but we are doing that because we did not invest in home energy efficiency or renewables.
The Motion refers to the role of the consumer protection regulatory regime in energy markets. For my final period I want to focus on that and in particular on what that regime cannot do. The fact is that, while we rely on gas, we will be at the mercy of world markets, even without the other environmental considerations about using that gas. I will cut down what I say on this, because the noble Baroness, Lady Scott, has already covered it so well, but we are now building homes—people are picking up their keys for them today—that immediately need to be retrofitted, not only for environmental reasons but also so that people can afford to live in them. That is an absolute disgrace and a huge government failure.
There are also renewables. I was talking about oil and gas profits. How much better if people in the more prosperous communities that the noble Lord, Lord Young, referred to were able to invest in community energy schemes, putting solar panels and local wind turbines up and fuelling schools, doctors’ surgeries, factories and homes through that? Yet I keep asking the Minister: where is the funding for that and the plan for it that was promised last June? I got a Written Answer, which pointed to a bit of money going to farms. That is the only thing that the noble Lord could point me to.
I also want to look at the structural issue of privatisation. The noble Baroness, Lady McIntosh of Pickering, said that competition is not working and the noble Lord, Lord Whitty, spoke in his introduction about the absolute mess of the privatised utilities. The last figure that I have been able to find is from November—I would be interested if the Minister could update me on this—when the cost of the collapse of those privatised energy companies was £3.2 billion, or £120 for each household. That is the cost of ideology going on to those heavily indebted, struggling households. If we could just run these essential services, such as our energy and water companies, for public good, not private profit, we would take some of the pressure off our heavily indebted households.
My Lords, I thank the noble Lord, Lord Whitty, for this timely debate. It is a pleasure to follow the noble Baroness, Lady Bennett of Manor Castle.
People are facing a twin threat of rising prices and shrinking incomes. The announcement of the new energy cap comes on the day when, as some have mentioned, Shell has announced that its profits have risen from $4.8 billion to $19.3 billion. It is so awash with money that it is paying an extra $8.5 billion to its shareholders in the shape of a share buyback. In the last decade, oil and gas companies have paid £200 billion in dividends while the regulators have been twiddling their thumbs and doing absolutely nothing. Over the last decade, the big six energy companies have paid £23 billion in dividends, which is 82% of their pre-tax profits and six times the amount of money that they pay in corporation tax. The sad truth is that the UK, unlike Ireland, cannot even produce its own electricity—it has to import it. It does not even have enough storage facilities for gas; thanks to the Government, they have been run down. Our gas storage facilities are equivalent to only 2% of our annual demand compared to—
Ireland does not generate its own gas—it gets it from us.
Other countries are better at handling it, if you like. Let us look at Norway. Norway collects about $21.35 for each barrel of oil extracted from the North Sea because it kept a large part of it under public control. The UK gets only 8% of that: $1.72 per barrel—those are the figures for 2019. Why? Because of this obsession with light-touch regulation and privatisation being good, while people are basically struggling. It is shameful that as a nation we are not even able to generate our own electricity—enough to meet our needs.
Today’s announcement by the Government does not really help that much: £693 or £700 extra. Perhaps the Minister will be able to tell us how much additional VAT will be generated as a result of this hike in the energy price and exactly where it will go. The Government should have listened to the Labour Party and its call for a 5% cut in VAT. The imposition of that 5% is highly regressive: the poorest suffer the most. The Chancellor said today that he did not really want to reduce it because that helps the rich. That is interesting: the Government have been handing all kinds of tax cuts to the rich and he never complained, but now he says that this would help the rich. Of course, the Government could claw back the equivalent amount from the rich by, for example, increasing the highest rate of income tax from 45% to 50%. That option is always available, but not exactly exercised.
The 2% electricity discount is also highly deceptive. It is not a discount at all. If I go to a supermarket and it is selling something on a discount, that does not mean that I have to repay that amount over the next five years, which is what people are being forced to do here. They will have to repay about £40 over the next five years. The £150 council tax rebate does nothing for the poor or those living in rented accommodation. It would also be helpful to know who is paying the cost of that. Will central Government be bearing the cost of that £150 discount, or will it lead to a further cut in local authority budgets as they are forced to bear this cost? Even if this £150 gift, as some people are calling it, is accepted by some, what happens to the other £350 of the cost of energy that people will have to bear?
The Government need to rethink their entire economic policy. They need to help the poorest. They have already cut universal credit by £1,040 from 4.4 million people. They are offering only a 3.1% increase in the state pension, while the CPI is likely to be double that rate. The increase in minimum wage is 6.6%, while RPI is already at 7.5%, so that does not really do anything. Winter fuel payments have not changed since 2011. The Government need to offer an immediate increase in the state pension of £500, double the winter fuel allowance and increase universal credit and the minimum wage at least in line with RPI to give people a cushion.
Although we have talked about energy prices, we have not said much about what is happening to retail prices. Just in the past six weeks, the price of 18 essential, staple items has gone up by more than 8%, and supermarkets, now owned by private equity, are basically lapping it up. Morrisons has increased its price of those 18 items by 15.3% in the past six weeks and Asda by 13.6%. Why are the Government letting private equity rip and increase the cost of living?
My Lords, it is always instructive to follow my noble friend Lord Sikka. I thank my noble friend Lord Whitty for his choice of debate. I know of his union life, when he devilled at the highest level brilliantly for the low waged. As a director of the apparatus of the party, he presented manifestos that sought to enhance the lives of the unemployed and the underprivileged.
Born in 1937 and growing up during World War II and the immediate post-war years, one recollects the frequent complete loss of domestic power for many hours. The great winter of 1947 tormented us all and Lord Manny Shinwell’s Cabinet career collapsed when he could not deliver coal to the power stations. In those days, there was only one warm room in the house; it is a history of when we were all in it together. Of course, there was heating—personal heating by hot water bottle. It was a time when one woke up to ice on the inside of the windowpane and when chilblains denoted the cold house and the bus stop queueing routine, as my noble friend Lord Young recalled.
Much has changed. However, climate change has not abolished the contemporary cold house. The cold house does not add to the hope for human happiness. It destroys morale. It makes the young children therein quarrelsome and can impinge on the everyday health of its tenants. Eating and sleeping in a constantly cold house can be soul destroying. There are households where there is always a wintertime contest between the semblance of warmth and debt—for example, the manipulation of the credit cards that the householder might have. There is the predicament of the low-waged having weekly recourse to the church or chapel food bank. The noble Lord, Lord Bird, has great insights here.
We in your Lordships’ House live here, swathed in our ermine and surrounded by carvings, statuary, murals, Axminsters and gilt. We septuagenarians and octogenarians notice the Chamber temperature and the difference between our Monday sittings and the rest of the week. Our civilisation puts man on the moon and speeds us in five hours from London to Edinburgh, while millions of our fellow citizens live in homes where daily payment and warmth are for ever in consideration.
An Englishwoman’s home is her castle and it should not be a bone-chillingly cold castle. We do not convincingly enable the young single mother, with her several youngsters, to face those six or so draughty, cold months surrounded by warmth. She and they may well be on benefits and, at the grass roots, it is a daily life of difficult decisions and stress. It is wrong, unjust and hurtful to the young ones. How many such households exist? Is it in the tens of thousands? Perhaps it is hundreds of thousands in our nation of 60 million-plus—a nation still fissured by wealth and poverty, class and expectations. Will the Minister make an estimate? If he can, our debate should then have better context.
These households exist in Wales, Northern Ireland and Scotland as well as in England. As a one-time Prince of Wales said, in the lovely land of Wales—one’s own homeland—something must be done. It is still a truism. Some homes today have had their gas and electricity turned off. Does the Minister have any idea of the numbers? It is a fact that the household budget of even the comfortably off is dominated by major day-to-day outgoings: first, of course, the gas and electricity bills; then the council tax; then the filling of the tank of the still-ubiquitous petrol and diesel cars; and then all those other necessitous direct debits to the public utilities and the ever-growing number of insurers. It is getting harder and harder.
Over many decades, successive differing Governments have offered up bureaucratic, credible alibis on energy, but still the problem remains. The bald, cunning, devious Kremlin gangster has not even started yet. In all this, what of the high-energy-demanding British steel industry? What, indeed, of manufacturing generally?
My Lords, I follow other noble Lords in congratulating the noble Lord, Lord Whitty, on the timely nature of this debate, coming on this day when we have seen a staggering increase in the energy price cap, the Bank predicting inflation at 7.25% by April and the Bank rate rising by a further 0.25%, impacting on millions of borrowers and current mortgage-holders on variable mortgages, plus all the people who will enter the mortgage market in the coming years. It has been estimated that the average rate is likely to rise from 1.6% to 2.5% by the end of this year. So there is a whole series of pressures—not just home costs and energy costs but the knock-on effects on the wider economy. The one thing about energy inflation, of course, is that it feeds through our whole economy and will continue to do so for some time.
Back in 2015, I had a conversation with Stewart Wood—now the noble Lord, Lord Wood of Anfield—who was at the time working for the then leader of the Opposition. He was talking to me about the Labour Party’s proposal for a price cap and what the Liberal Democrats’ view of it was. I gave him my personal view: I lived for some time in Zimbabwe, where the Government thought that they could cap prices. The impact was that there is no decent electricity supply in Zimbabwe anymore. Stewart perhaps thought that I was trying to compare the leader of the Opposition at the time to Robert Mugabe, which was not the point. The point was that, at the end of the day, no Government can insist that a business, or even a public utility, should supply goods in the long term at a lower cost than they cost them. It is just not sustainable.
Of course, this is not the moment to lose price caps, but we have to understand that, in addition to this 54% hike that people are going to see—indeed, for some people it will be up to 100%, because they may be coming off fixed rates—we also have the costs that will be piled on to energy bills to pay for the collapsed energy companies. Some have estimated that it will cost as much as £94 per household to cover the cost of those that went bust. I would be interested if the Minister could shed some light on that.
On top of this, the Government are now proposing that part of the way out of the current situation is a solution that will put further costs—a further £40—on bills later. As the Resolution Foundation said today, it is about slightly smaller bills today for even bigger ones tomorrow. That is no solution in the long term. On top of that even, the Government are proposing, in a Bill that will come into the House on 21 February, something called the regulated asset base model for the funding of nuclear, which will pile yet more money up front on the bills of millions of consumers.
At the same time, as many noble Lords, including the noble Lord, Lord Sikka, have mentioned, we see Royal Dutch Shell and all the oil and gas majors showing record profits. I do not intend to get into a debate about who proposed what first with the Green Party, the Labour Party or anybody else, but as my noble friend Lord Shipley said, the Liberal Democrats proposed a windfall tax—a Robin Hood tax, as he called it—on those oil and gas majors, which would help to provide a doubling of the warm home discount, a doubling of the winter fuel allowance and a £500 million fund to assist energy-intensive industries, which the noble Lord, Lord Jones, mentioned.
However, the truth is that we are where we are because of an abject failure of energy policy on the part of the Government. It starts with their failure on home insulation. My noble friend Lady Scott of Needham Market set out clearly the nature of that failure. We should, however, put that in the context of what the noble Baroness, Lady Bennett, said, which is that the best energy saving is the energy that one does not use. Contrary to much that we have heard from the climate chaos fanatics who, sadly, are not represented here, and who say that it is all about us pumping not enough gas or putting too many green levies on bills, the truth is that the price rises are to do with fossil fuel, not green levies.
Total household expenditure on energy between 2010 and 2019 fell from £27.7 billion to £23.4 billion. One of the main reasons for that was that domestic gas and electricity consumption also fell in that time, from 43,717,000 tonnes of oil equivalent in 2010 to 34,282,000 in 2019—a 21% drop. A huge reason for that was some of the efforts made by the coalition Government, in particular by my right honourable friend Edward Davey as Energy Secretary, to push home energy efficiency. In March 2015, just before the end of the coalition, there were 53,894 monthly installations. In March 2019, that had figure fallen to 13,929. I have used the 2019 figures in all those statistics so that people cannot say, “Oh well, that’s just to do with Covid”. That has been costing households, as my noble friend Lady Scott said, an absolute fortune. In addition, as she also mentioned, the zero-carbon homes standard of the coalition was scrapped by George Osbourne—another one of his mistakes.
I say to the noble Lord, Lord Young, who thinks that somehow if there were more fracking or we were pumping more gas from the North Sea it would solve our problems, that I am afraid the truth is that it would not. The astonishing fact is that between September and November 2021, the latest period for which figures are available, the UK exported 31,975 gigawatt-hours of gas. Between September and November 2020, the figure was 15,830 gigawatt-hours—less than half. In case people say that that was just because of Covid, the figure for the same period in 2019 was 19,633 gigawatt-hours. The truth is that we are operating in a market, and all that would happen if we pumped more gas is that we would export more of it. The idea that whatever we could pump would materially bring down prices, unless we somehow seized those assets and nationalised them, is for the birds.
The inflationary impact of energy is massive, but it comes amidst so many other inflationary pressures. The impact on the lowest paid, as we have heard from my noble friend Lord Shipley, the noble Baroness, Lady Crawley, and many others, will be particularly acute, and I join him in calling for a realistic price index that really reflects the impacts on the lowest paid.
In conclusion, we must have a radical overhaul of our energy system and economy, so that we can get to a stage where the Government are not boasting about the funding they are giving to food programmes and holiday activities, but are ensuring that we have an economy in which people can earn a decent wage and have a decent life.
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.
My Lords, I thank the noble Lord, Lord Whitty, and admire him for his prescience in selecting such an appropriate subject for debate today. He must have had more advance notice than even I had of when the Government’s announcements were coming, so congratulations to him on a very timely and informative intervention. Of course, I am grateful to everyone who has contributed today on this topical but also extremely vital subject. I will try to address as many of the points as possible that noble Lords raised, but this has been a wide-ranging debate and, if I do not manage to cover everything, I am sure that we can catch up in writing.
The Government of course recognise and understand the pressures that people are facing with the cost of living and we will continue to listen to people’s concerns, as we have done throughout the pandemic. I agree with the noble Lord, Lord Monks, and many other speakers in recognising that this is a timely debate, with the energy regulator’s announcement just a few hours ago and the Chancellor’s announcement on the back of that. The regulator’s announcement was for the period April to September 2022.
In a recent debate secured by my noble friend Lady McIntosh, I set out that wholesale energy prices have been rising, as we all know, due to increases in the price of wholesale gas, to which multiple international factors have contributed. I start by reiterating that energy security remains an absolute priority for the Government and we are confident that our energy security will be maintained. We continue to work closely with key industry organisations, including Ofgem and National Grid gas, to monitor both supply and demand. In response to the point made by the noble Lord, Lord Sikka, we meet around half of our annual gas supply through domestic production and the vast majority of our imports come from reliable suppliers such as Norway.
As I have said before in the House, the energy price cap has, for the last six months, protected millions of households during the winter period from the volatility seen in wholesale gas prices. The Government have committed to retaining powers to implement a price cap beyond the current long-stop date of 2023, should that prove necessary. However, as noble Lords will know, sadly, the rising wholesale costs of energy have now fed into the price cap’s methodology, leading the independent—I emphasise that—regulator, Ofgem, to increase the level at which the price cap is set. Recognising the impact that this will have on households, I am pleased to update the House, as the Chancellor did this morning in the other place, that the Government are taking action on the back of this.
Today the Chancellor announced a £5.6 billion energy bills rebate, which will help households to deal with the unprecedented increase in energy bills that we have seen this year by helping to smooth the costs over subsequent years. The rebate, which will shortly be consulted on by my department, will provide households with a payment of £200, which will be credited to their energy bills by their current energy supplier. This rebate will likely start issuing payments to energy suppliers to pass on to their household customers from autumn this year, which of course is when households will need it most as we head into the winter period next year.
In response to the point from the noble Baroness, Lady Bennett, let me make it clear that while the mechanism will be subject to consultation, this scheme is not a loan. No interest will be charged on the upfront funding provided by the Exchequer. The Government will seek to recoup the funding at a later stage, smoothing out the cost increases we have witnessed in the wholesale energy markets. The department will work closely with industry and consumer groups on how we can best deliver this policy, with a consultation planned for the spring.
This is an important and timely measure, which will help households at a time when they need it most. In addition, the Government have announced further support for delivery outside of the energy system to help with the wider cost of living. We have also today announced a £150 payment for the 80% of English households in council tax bands A through D. This measure will be worth the equivalent of more than 2.5% of net income in 2022-23 to the poorest 10th of households, compared with less than 0.5% to the richest 10th. In addition, there is £144 million of discretionary funding for local authorities to support households who need support but for some reason are not eligible for that council tax rebate. The combined package could see some households receive £350 over the coming financial year to help them with the cost of living. This is worth some £9.1 billion.
This new support package is on top of the existing set of measures in place to support families, worth around £12 billion a year. These include energy-specific measures targeting the fuel poor. The noble Lords, Lord Whitty and Lord Oates, and my noble friend Lady McIntosh mentioned the warm home discount scheme which provides support with energy bills through rebates, helping households stay warm in the winter months. The scheme currently provides over 2 million low-income and vulnerable households with a £140 rebate off their winter energy bills. I am pleased to confirm to noble Lords that BEIS has already consulted on proposals which would expand the scheme from around £350 million to £475 million per year, at 2020 prices, which will help the scheme reach 3 million households from winter next year onwards.
On the very important subject of energy efficiency, I am afraid I have to tell the noble Baroness, Lady Scott, that she is simply wrong. The energy company obligation has already installed 3.3 million measures in 2.3 million homes. We are increasing, not cutting, the amount energy suppliers invest in energy efficiency measures for low-income households. From April this year, the start of the next financial year, this will be extended until 2026 and we are boosting its value from £640 million to £1 billion a year, helping the poorest households to install the energy efficiency measures that many noble Lords referred to.
In addition, for the benefit of noble Lords who raised the issue, such as the noble Lords, Lord Oates and Lord Shipley, and the noble Baronesses, Lady Scott and Lady Bennett—amazingly I agree with one point the noble Baroness, Lady Bennett, made—the best form of green energy is indeed not using it in the first place, through energy efficiency measures. This is precisely why we are investing over £2 billion a year in energy efficiency schemes, through projects such as the home upgrade grant, the local authority delivery scheme, the sustainable warmth competition and the social housing decarbonisation fund. All of these are helping to provide long-term solutions by improving the energy efficiency of the homes of the poorest people in society—exactly those who should be deserving of our support.
In addition to all that, the Department for Work and Pensions has a set of measures to support households with their energy bills. The £500 million support fund was announced last autumn to help those most in need this winter. This includes provision for utility costs, including energy. The DWP also continues to provide support for vulnerable users and pensioners through its winter fuel payment and cold weather payment.
Picking up on some of the points made by noble Lords, the debate was well introduced by the noble Lord, Lord Whitty, who asked a number of questions, as indeed did the noble Lord, Lord Oates, about the retail market and supplier failures. As a result of high gas prices, some 26 suppliers have exited the market since the beginning of August 2021. The current situation has been precipitated by unprecedented conditions. In the vast majority of those cases, the Government and Ofgem have utilised the supplier of last resort process, which has been set up to protect customers when their supplier fails to ensure that they do not suffer any disruption or lose any of their credit balances. Ofgem and the Government will continue to look at ways to reduce the costs that arise from a supplier of last resort process, but it is clear that it is a vital safety net that has protected millions of consumers. Last October, Ofgem published a letter to industry setting out the actions that it will take to reform the retail market. This includes reviewing licence conditions to strengthen the financial resilience of suppliers and help restore stability to the sector.
I was also asked about retail market reform. The Government want a retail energy market that continues to protect consumers now and as we transition to net zero, while engaging them with positive choices about their energy supply. We want a competitive market whereby companies invest in innovation and offer products and services that help us in our drive to decarbonisation.
The noble Lord, Lord Whitty, talked about retail market regulation to support progress to net zero. In considering these reforms, the Government will take account of the lessons of the current market. In fact, we published a call for evidence on the future of the retail energy market. A strategy will be published as soon as possible once the current market situation has stabilised.
The noble Lord, Lord Oates, raised the issue of funding our future policy costs to deliver net-zero policy. He will be aware that, as set out in the heat and buildings strategy, we will publish a fairness and affordability call for evidence to set out the options for energy levies and obligations to help rebalance electricity and gas prices and to support green choices, with a view to taking final decisions in 2022. Consumers will be at the heart of those decisions.
The one question that the Minister has not answered is what the Government’s estimate is of the added cost to bills as a result of the 26 energy company failures that he mentioned. Citizens Advice estimates that it has put £93 on bills. Do the Government have a figure?
I do not have a precise figure in front of me. It is a complicated issue because it depends on exactly where the costs fall but if the figures are available, I will write to the noble Lord with as much information as I am able to provide.
In response to the point made by the noble Lord, Lord Whitty, on national insurance rises, the lowest earners will, of course, be protected from the levy. The highest-earning 15% will pay over half the revenue and 6.1 million people earning less than the primary threshold or lower profits limit will not pay the levy at all. Regarding the rebate adding costs to bills further down the line, the aim of the policy is to reduce energy bills for households in Great Britain in 2022-23; it is to be paid back automatically and interest-free over the next five years. This is a fiscally responsible approach that helps customers to manage the unprecedented increase in energy bills by spreading the increased costs of global prices over time.
My noble friend Lord Howell of Guildford, as he normally does, made some good points about our overall energy strategy. He will be aware that the energy White Paper set out a vision for transforming our energy system, backed up by practical action. We will address the decarbonisation of the power sector on a whole-system basis so that we deliver low emissions and maintain high levels of reliability and resistance, while ensuring that the cost of the transition is fair and affordable. The Government are taking a range of important steps to decarbonise the power sector, while establishing business models to support hydrogen-fired generation, new nuclear and CCUS-enabled generation, and to support the development of flexible storage.
I agreed with many of the sensible comments made by the noble Lord, Lord Young of Norwood Green, from whose expertise in this area we have benefited. He reminded us—it is worth making this point—that these are difficult, complicated issues, which need long-term holistic solutions. Of course, we are all searching for a simple, easy answer, but many of these issues take decades to come about. One issue that I could highlight is that of new nuclear. The noble Baroness, Lady Blake, criticised us for not developing new nuclear, but these projects take decades to bring about. The main reason for the decline in the nuclear industry in the UK was that Labour abandoned our nuclear programme when it came to power in 1997. For the whole of its period in government, no progress whatsoever was made on new nuclear. We are now reversing that and proceeding with new nuclear developments, but it takes many decades to bring them online. I believe that, in considering our energy system, that decision will prove to be one of the biggest mistakes in energy policy over recent decades.
The noble Lords, Lord Shipley, Lord Monks, Lord Sikka and Lord Oates, the noble Baroness, Lady Crawley, and other noble Lords raised the issue of a windfall tax. It is worth pointing out that the UK Government already place additional taxes on the extraction of oil and gas, with companies engaged in the production of oil and gas on the UK continental shelf subject to headline tax rates on their profits that are currently more than double those paid by other businesses. To date, the sector has paid more than £375 billion in production taxes. We are always considering a full range of options to support consumers and businesses through the current high price challenges, but it is important to remember that any action that we take must not have broader negative consequences for the economy.
All Peers have referred to the importance of attracting investment and achieving our energy goals, which will require vast investment from the private sector in our energy system. If the Government woke up one morning and imposed windfall taxes, however attractive that might sound, that would massively impact the amount of inward investment that we attract into the country. While the dividends of those companies have been criticised, we should never forget that many of those dividends go into paying the pension funds that help to pay the pensions of the many pensioners that noble Lords highlighted who might be suffering from fuel poverty this winter. There are never any easy, simple or straightforward solutions to these problems, however much we might want to think that there are.
My noble friend Lady McIntosh raised the important issue, as she often does, of off-gas-grid consumers. The Government believe that it is essential that consumers of LPG and heating oil get a fair deal. In our view, the LPG and heating oil markets do not share the monopoly characteristics of network utilities and are therefore not subject to price regulation under Ofgem. However, I can tell my noble friend that the energy rebate announced today is being passed through to suppliers to pass on to domestic energy users, including off-gas-grid consumers, who are, of course, electricity customers.
The noble Lord, Lord Jones, asked for estimates of the number of homes struggling. We regularly publish updated fuel poverty statistics, including projections for 2022, taking into account the price cap increase and the measures announced today. We will publish those on 24 February. In addition, Ofgem regularly publishes its statistics on vulnerable consumers and indebtedness through its consumer protection and vulnerability reports.
Lastly, the noble Baroness, Lady Blake, spoke about the important subject of hydrogen. We are committed to the development of hydrogen as a strategic decarbonised energy carrier for the UK. We are currently taking a twin-track approach, covering both electrolytic hydrogen from renewables and methane reformation with carbon capture, usage and storage. Both methods of production are covered by innovation schemes and policy development.
As I have set out, the Government have listened, recognised and acted on the concerns of families struggling with the cost of living. As I said at the start, the energy bills rebate will provide over £5.6 billion of support to households later this year, ahead of the next winter period, while the additional support for English homes in council tax bands A to D will further help households with the cost of living—a total package worth £9.1 billion. Of course, the Government will continue to engage with industry, consumer groups and other stakeholders as we progress these measures and I am sure that we will have further debates as these policies develop in the coming months.
My Lords, I genuinely thank the Minister for that comprehensive reply, in which he gave some additional information about the Chancellor’s announcement, which I shall look forward to reading in detail, and made some other points that we need to take on board in this context. It is an extraordinarily complex issue that we have been addressing today but, at the end of the day, the immediate problem, as well described by my noble friend Lord Jones, is that of families living in cold and in debt. We have an opportunity, if we can get this right, of making sure that what has happened today does not make their situation worse but begins to ameliorate it.
The bigger point that I am making—big and emotive though that is—is that there are three different things that we need to address. We need to address the immediate impact of the gas price rise on the poorest families and on all families, in many respects, and on our economy. I hope that the Chancellor has gone a little way towards that, although I do not think that he has gone far enough and I think that some of the means that he is proposing are very odd. It is very odd to use council tax as a way in which to give back money; it is similar to using national insurance in the way that the Government have done to raise money for the health service and social care. There is a tax system that we should be using for these purposes, which would be much more progressive than what he proposes and much better targeted. However, he has done something and I appreciate that.
The second crisis, of course, is the one that the noble Baroness, Lady McIntosh, and others clearly outlined: the present regime with Ofgem is not effective in creating a market where competition really works, as distinct from one that is very vulnerable, or one that protects the more vulnerable consumers. I am glad to hear that we are having an assessment of consumer regulation under Ofgem, but we need to make that serious and effective. I look forward to seeing progress on that as rapidly as possible. The Minister made a pointed remark that Ofgem is independent; it is sort of independent, in the sense that it is at arm’s length, but it works within a framework defined by government and by legislation. I am looking forward to the next White Paper and energy Bill—I am not sure that the Minister is, but I am.
The third issue is that we need to ensure that our energy system and its interrelationship with consumers and industry prepares now for the transition away from fossil fuels. Given the failures that we have had recently on the relatively easy part of protecting consumers, the way in which we take the economy and consumers through a massive change in energy supply, in every house and flat in the land that uses gas, will have to change. We do not at this point know how it will change or what it will cost. The immediate answer put on the table by the Government is to have air pumps, which is putting people off because of the current cost of air pumps, and particularly putting off those who may have to adopt them early, such as the rural consumers that the noble Baroness, Lady McIntosh, mentioned.
Energy efficiency is a vital part of this, as the noble Baroness, Lady Scott, and others emphasised, and as the Minister accepts, but the intervention to change how we heat our homes and provide basic warmth for our children and elderly people will have to be much more substantial than the inadequate response from the industry and regulator to the gas price hike. It is a much bigger issue and we need to make sure that we have a regulatory system that is capable of taking it on and taking consumers with it. The Minister has a big task to resolve all those issues, but at least he has given us some indication of how the Government are thinking today and I thank him and everybody who has contributed to this debate.
Autocrats, Kleptocrats and Populists
Motion to Take Note
That the Grand Committee takes note of the impact on global democratic norms and values from autocrats, kleptocrats and populists and the case for a coordinated response by the United Kingdom and her allies.
My Lords, I am conscious that we are having this debate on the day that Xi Jinping and Vladimir Putin are, as the Times has reported,
“cementing an alliance to make the world safe for autocrats.”
I am also conscious that we are debating this on the day we hear that the First Minister of Northern Ireland is intent on resigning and possibly paralysing the Government of Northern Ireland, which definitely defeats the democratic intentions of the people of Northern Ireland. But I am confident that by the end of this debate we will be in a position, because of your Lordships’ contributions, to allay the fears of the people of the world in respect of this global alliance, and of the people of Northern Ireland as to how their democracy is not under threat either.
Democracy is in retreat and authoritarianism is on the rise. According to the University of Gothenburg’s V-Dem Institute, non-democratic countries outnumber democracies for the first time in 20 years, and 2021 was the fifth consecutive year in which more nations moved towards authoritarianism than democracy. In December, President Biden convened a virtual summit for democracy around an agenda that challenged authoritarianism and sought to fight corruption and kleptocracy and promote human rights. He said that
“we stand at an inflection point”,
with the future of democracy facing
“sustained and alarming challenges”.
In fact, the V-Dem Democracy Report 2021, which reflects analyses based on an assessment of nearly 30 million data points and aspects of democracy such as the freedom and independence of legislatures, judiciaries, the media and civil society, and human rights, shows the continuing global decline of liberal democracy. Electoral autocracies are still the most common regime type and, along with closed autocracies—ones in which the people are denied elections—they are home to 68% of the world’s population.
The data shows a drift of democratic backsliding engulfing 25 nations, or one-third of the world’s population. G20 nations such as Brazil, India, Turkey and the USA are part of that drift. Poland wins the shameful title of the country which declined the most during the past decade. I am confounded by that, given the history of Poland.
The process of decline follows a predictable pattern. Once elected—fairly or, more likely, after some manipulation of the electoral process—autocrats tend, if possible, to quickly remove the time limits on their term of office. They maintain power through centralised control of information and resources; political opposition is either forbidden or strongly curtailed; and individual freedom is limited by the state. First, they attack and repress the media and civil society and polarise societies by disrespecting opponents and spreading false information. Then, they undermine elections.
Dominant party authoritarian regimes exploit Western legal and financial systems against Western media where it is critical of their regimes. They sue the media, or they buy it. Russian companies have acquired large ownership stakes in foreign media companies and influenced their operations. They have engaged in disinformation campaigns that exploit weakness in our freedom of speech protections.
It is now common knowledge that Russian-controlled agencies and businesses played a strategically vital role in interference in the US 2016 presidential election, showing that it is possible to interfere destructively in the most powerful Western democracy. The ISC Russia report found credible open-source commentary suggesting that Russia undertook influence campaigns during the Scottish independence referendum. Although accepting that the evidence about the EU referendum campaign was less clear-cut, the committee recommended that the UK intelligence community produce and publish an assessment of possible Russian interference in the EU referendum to reassure the public that our democratic processes are safe. I should like to see that reassurance.
Rule by thieves arises when a country’s elite begins systematically to steal from public funds on a vast scale. Undermining democracy and the legal system, it gains control over vital economic assets and amasses substantial wealth. No longer is kleptocracy a corrupt political system in a few poor nations. It is a global network, with members including world leaders and powerful businesspeople. Assisted by corrupt professionals with the expertise to launder their wealth through a maze of shell companies, they secure it in luxury assets in the West or in our banks. According to the IMF, as much of 5% of the world’s GDP is laundered money and only 1% of it is ever spotted.
Collectively, developing countries have lost $16.3 trillion to elicit leakages since 1980. Their people struggle, they starve, they die, while their Governments export the country’s wealth and become net creditors to the world’s economy. Some of the money is hidden right here. Prime UK properties provide an attractive conduit for securing and legitimising the laundered funds. Despite much rhetoric, progress on paper and repeated parliamentary calls for change, the UK remains a haven for dirty money, a great deal of which comes from Russia and Eurasia.
It is not just money that is laundered but reputations as well. Family and key friends and allies of the thieves merge into our UK society at the very highest level. Some acquire British citizenship following receipt of a “golden visa”. Settled here, they donate to charities, threaten journalists with legal actions and make political connections and political donations. The Government have failed adequately to address this problem and, in the meantime, the provision of services by British professionals to kleptocrats corrupts our world-leading financial services and corrupts and undermines the famous efficiency of our legal system. Worse, it degrades our international reputation as a beacon of democracy and honesty.
The Government placed combating serious organised crime at the centre of their foreign policy but seem not to recognise the intimate connections that UK society and institutions have with kleptocratic states and their elites, who continue to find a welcome in London. The number of times that parliamentarians have drawn attention to this issue in reports, debates and Questions are too numerous to list. Yesterday, the Treasury Select Committee published but the latest example. In its report Economic Crime, one paragraph says it all. I refer to paragraph 230, which I will read short in the interests of time:
“Reform of Companies House is essential if UK companies are no longer to be used to launder money and conduct economic crime.”
It says that there is change:
“However, the pace of change is slow. The problems with UK company structures were identified by the Government in 2014 in the UK Anti-Corruption Plan. While there have been welcome innovations, such as the People with Significant Control register, on current plans it will have taken over 10 years to improve matters, during which time a large number of UK companies may have been put to criminal use by a wide range of criminals.”
I qualify that, on my part but not on behalf of the committee, by saying that companies have been used in a criminal way by a wide range of criminals, including kleptocrats.
In Europe alone, populist politicians have recently risen to power in the Czech Republic, Hungary and Poland and have gained momentum in France, Spain, here and elsewhere. In Hungary and Poland, this has been accompanied by an erosion of the rule of law, democratic backsliding, greater authoritarianism and an increase in the persecution of minorities. In the words of Jan Kubik from UCL, contrary to Viktor Orbán’s rhetoric, there is no such thing as an illiberal democracy.
Populist parties and politicians divide societies into “the people versus the corrupt elite” and argue that politics should express the general will of the people. By “the people” they mean their people. They erode the informal norms of democracy, question the loyalty of the opposition and decry criticism as fake news. As winners of democratic elections, they fail to constrain themselves and instead hollow out and politicise formal institutions of that democracy. They undermine formal institutions such as the courts, legislatures and regulatory agencies as creations of a “corrupt elite”. Rather than tolerating a free press and political opposition, instead they try to undermine their legitimacy and, most insidiously, they redefine “the people” by excluding vulnerable ethnic or religious minorities, immigrants and marginalised economic groups. The result is majority rule without minority rights. Mainstream political parties, the backbone of representative democracy, have so far largely failed to address these threats and some centre-right parties have become populist instead.
In his remarks at the Biden summit, Boris Johnson announced that we in the UK
“are working with our friends to ensure that”
we are using
“emerging technologies … designed to safeguard our shared values”,
“developing countries to build clean and green infrastructure with transparent projects, that are open to scrutiny”
and deploying new
“national sanctions to target those responsible for … human rights violations.”
Further, he promised in the “Year of Action” to
“take even stronger measures against the illicit finance that undermines democracy everywhere, strengthening our … powers to go after the criminals who”
exploit our lax corporate structures, bringing
“openness to the purchase of properties in the UK”
and taking forward
“new laws to safeguard our democratic processes and institutions from those who would do us harm.”
As the RUSI report makes clear,
“2022 has the potential to be an impressive year of action for the UK. But it requires the prime minister to acknowledge the UK’s global illicit finance responsibilities and reverse his current irresponsible disinterest in a topic that—as it does the US—threatens the UK’s national security interests.”
It also requires our Prime Minister candidly to accept that, if democracy is to begin at home, this requires more self-awareness than hitherto he has been capable of. If he genuinely wishes to be seen as a global leader for democracy, he needs to be clear that he and his Government are learning lessons too.
During his time in office, our Prime Minister has progressively degraded norms and standards, such as with the unlawful Prorogation of Parliament and the failure to dismiss the Home Secretary for bullying, to name but two examples. It seems that this Government are still on course to assault our democracy. We need look no further than our present and upcoming parliamentary business: an election Bill that affronts the right to vote, a policing Bill that sought to criminalise protests and a Nationality and Borders Bill that has been described as stripping British citizenship with the stroke of a pen.
What is more, this Government appear set on limiting the courts’ power to hold public bodies to account through judicial review and intent on tearing up the Human Rights Act and placing legal constraints on whistleblowing and journalism—and all this against a background where the Government whipped their vote through Parliament to support a Motion that ripped up parliamentary standards in a doomed attempt to save the disgraced MP Owen Paterson, who had lobbied for companies that paid him hundreds of thousands of pounds. The reality is that our Prime Minister has presided over a culture of corruption and clientelism. What other words are there to describe a politics in which political donors are given privileged access to a VIP lane for lucrative Covid contracts? I have but one question for the Minister, whom I admire greatly, as I know do many of your Lordships: what is the plan of action for the year of action? I cannot find one anywhere in government documents.
My Lords, I hope that we are not going to deteriorate into a sort of two-party or three-party squabble, because the Question that the noble Lord has put on the agenda is a fundamental one in European and wider terms. In 1979, Jim Callaghan noted that the age of post-war consensus politics was coming to an end. He probably did not realise how true the words that he spoke were. Today we have not only a very unsatisfactory democracy for those of us who grew up in the immediate post-war world but one that is largely underwritten by the population. This is something quite new.
I spent most of my active political career travelling around the world in many different guises and visiting other countries with many different forms of democracy. When I started in 1979, most of them at least subscribed to the idea that they were doing the best for their people. But by the end of that era, where we are now, we have not only a situation that is quite unsatisfactory but, I put it to your Lordships, a system that has far more support from the grass roots than we should be happy with.
I spent 20 years in the European Parliament as its rapporteur on Turkey. I saw it from the rule of General Evren and the colonels right through to the present President, Mr Erdoğan, who was Prime Minister when I finished. We may not like it, but we have to accept that Erdoğan has won all the elections that he has stood in. They have all been observed by Council of Europe and OSCE delegations and been passed as, on balance, acceptable. The people of Turkey have consistently voted for the policies that their President has wished on them, even though most of those policies are a big abnegation of anything that we could call democracy.
The same can be seen in other countries. My son studied in Moscow. I visited Moscow around the time of the Crimea incident, among other times. It was clear that the Russian population were overwhelmingly behind Putin, and they still are. He still has a roughly 60% positive rating, which is something that Keir Starmer or Johnson can only dream about.
My point is that it is fine for us to feel unhappy about the decline in democracy, and I indeed do. I share a lot of the reservations the noble Lord, Lord Browne, mentioned but I also think that we need to look beyond where we are and see why it has come about. I think one of the reasons is the genuine collapse in confidence of ordinary people that politicians can make a difference to their lives. That is probably the thing we need to direct our attention to.
Politics has become far too professional. I remember when I came into politics in the 60s—this was after 1966—they used to say we have 300 members of the parliamentary Labour Party, 100 of them are totally unfit for office, another 100 do not want office so that gives us 100 people from whom to fill 80 ministerial posts. If you look back, Ministers lasted a long time. Now, virtually everybody in Parliament is capable of being a Minister, but I am not sure that they are capable of relating to the people who elect them to this building.
There is a fundamental challenge. I do not think it is a clash between two parties; it is a challenge for us to get our act together and start building democracy back and promoting the values on which it is based.
My Lords, I say to the noble Lord, Lord Balfe, that we have to say something about the UK’s standing as a democracy because that affects our ability to respond to the current situation. We all agree that we face a global push-back against democracy and the rule of law. It is led by China and Russia, supported by the central Asian states that emerged from the USSR, and now also by Turkey, with governing parties in two EU members, Hungary and Poland, drifting into that camp.
I want to stress the role that Middle East autocracies are actively playing in this development. We have seen the wealthy Governments of the UAE and Saudi Arabia actively working to suppress the democratic efforts of the Arab spring, supporting the military coup in Egypt, funding anti-democratic forces in Libya, helping to undermine democracy in Tunisia and contributing almost as much as Iran and Israel to the destabilisation of Lebanon. Their elites also penetrate open democracies such as the UK, employing PR companies and buying football clubs to bolster their reputations. They buy mansions and country estates and gain acceptance within our political and social elites. The current rise in energy prices will increase their ability to extend their influence through societies like ours.
The global reputation of democratic government has been shaken by recent events in the United States and Britain. The American Republican Party, which some in our Conservative Party still see as a model they wish to follow, is engaged in voter suppression and election-fixing. Here, we have a Prime Minister who has broken the Ministerial Code on numerous occasions and stretched the boundaries of reasoned debate, respect for opposition and the rule of law.
The Lords will shortly be scrutinising the Elections Bill—it was originally entitled the election integrity Bill but has now dropped the claim to integrity—which has been designed to tilt our democracy further in favour of the Conservative Party. That will be followed by the Higher Education (Freedom of Speech) Bill, an almost direct copy of Republican efforts within the United States, which is intended to extend state influence over university teaching and appointments.
Populist Ministers in our Government repeatedly attack the BBC for its failure to present the government line uncritically. The Prime Minister loves to talk about Britain as a “soft power superpower”. I remind the Minister that the integrated security strategy published a year ago noted five key elements of British soft power as the BBC, the global reputation of our universities, the generosity of our international development efforts, the work of the British Council and the strength of our cultural sector. All have been undermined since then by government decisions and ministerial attacks.
Our populist Prime Minister loves to talk of Britain “leading” a group of democratic nations across the world. Sadly, we are in no position to lead the democratic world now. A glance at overseas media across continental Europe, south Asia and North America shows that the political antics of recent years have replaced respect with ridicule. I sympathise with the Minister, who must of course defend the Government; he is somewhat better than this, but he will be painfully aware of the damage that current events have done to Britain’s global reputation.
However, at least we can do something to reduce the penetration of British politics, society and business by kleptocrats from authoritarian states. One of the most disturbing statements in the Intelligence and Security Committee’s Russia report, in paragraphs 50 and 53, was that the integration of post-Soviet oligarchs into
“the UK business and social scene … cannot be untangled, and the priority now must be to mitigate the risk”.
Boris Johnson’s attempts to downgrade and delay government action in response to the recommendations of the Russia report are one of the most disgraceful aspects of his premiership.
Priority in the next parliamentary Session must be given at last to the economic crime Bill and revision of our outdated Official Secrets Act. I hope also that the Government will accept the amendment I have tabled to the Nationality and Borders Bill to suspend the tier 1 investor visa scheme, which has allowed oligarchs to import corruption into the UK and buy access to the top of the Conservative Party. Such changes will reduce the damage that has been inflicted on Britain by corrupt and hostile foreign influences. But other changes will be needed to restore our damaged global reputation as a democratic, open society.
We were due to hear from the noble Lord, Lord Hacking, but he is not here. Perhaps the noble Lord, Lord Hannay, would now like to speak.
My Lords, the last century, the one in which many Members of your Lordships’ House spent most of their lives, opened with a world dominated by empires and autocracies, and with true democracies very much in a minority. The century closed with democracies in the ascendant, the empires largely gone and something close to a rules-based international order having emerged from the ashes of two world wars and one long Cold War. Any complacency that that progress might have engendered has long since dissipated, with several autocracies or quasi-autocracies prominent, and with the rules-based order under threat, from within as well as from outside, as supporters of unfettered national sovereignty espouse policies that are inconsistent with their countries’ obligations under international law. So, today’s debate is timely and I warmly welcome the initiative of the noble Lord, Lord Browne of Ladyton, in securing it, and his excellent introductory speech.
What needs to be done to check the trends of the last few years and to secure what was once described as
“a world safe for democracy”?
First, we need to ensure that our own democracies are in good working order and that they are promoting, in practice as well as in rhetoric, policies that strengthen other democracies worldwide and further respect for human rights, as laid out in the UN’s Universal Declaration of Human Rights in 1948. We also need to ensure that our democracies encourage effective international co-operation to address the great challenges of our time: climate change, pandemics, the risks of nuclear proliferation and war, and trade protectionism. That will not be the work of one year or of one Government. It will require concerted effort over decades, and it is not happening—yet, at least.
Should this effort involve a more or less formal grouping of democracies? I rather doubt whether that is the right direction in which we or others should be moving. Such a grouping would raise plenty of problems—first, what is described as the “sheep and goats” problem. How do you decide, and who decides, which countries are truly democratic sheep and which are undemocratic goats? It is not easy, and certain to lead to many difficulties over borderline cases. Moreover, while such a grouping can apply policies and make rules for its own members, it cannot hope to make such policies and rules binding on others. Where globally applicable rules are needed, as with the global challenges that I mentioned earlier, this grouping will simply not be able to deliver the goods.
So, while it is right for democracies to work very closely together, I also suggest that they would best do so within global institutions, many of which already exist, even if their efforts are so far inadequate. Yes, we ourselves should be working to strengthen other democracies and working with regional bodies such as the European Union and the African Union, which are mandated by their founding charters to uphold democracy; but we should not regard democracy as something to be imposed by force nor, conversely, as in the case of Taiwan, to be reversed by force.
Those global institutions I referred to may not be working very effectively, but should they be replaced by something different? In my view, that would be an act of folly. Is there really any likelihood that they would be replaced by something better? Just read the UN charter, if you want an example, and ask yourself whether that document could be negotiated today. More likely, the world would slip back into the law of the jungle which prevailed in the first half of the 20th century and from which it had to be rescued by the democracies, with the expenditure of much blood and treasure and massive human suffering. What is needed, surely, are policies of incremental reform, which will make those global institutions more fit for purpose. I hope that our own country will play a prominent role in shaping the reforms needed, as we did with honour in the past, and that we will act by example and not just by assertion.
I have to say that some of the legislation that has come before your Lordships’ House in recent years—the internal market Act, the external operations Act and the Bill before the House this afternoon on frontiers and border protection—is inconsistent with our obligations under international law. The Minister can stand at the Dispatch Box and say that this Parliament is sovereign and can change these things if it wishes, and that is correct—but another Minister cannot succeed that Minister at the Dispatch Box and say that we are the great supporters of the rules-based international order.
In following the noble Lord, I very much agree with him that we should refer ourselves back to the creation of the United Nations, the World Bank, the IMF and the other institutions. Indeed, the Motion refers to co-ordination, which is a very important point.
I move on to sub-Saharan Africa, where there is a quarter of the world’s poorest countries. It seems a very good example of the struggles to arrive at a proper understanding of the norms and values of democracy. It has been said, and I think it is right, that the best thing about democracy is that it enables you to change your Government without violence. In sub-Saharan Africa, that is by no means universally the case. Another thing that one could say is that some countries that have been mentioned today, including our own, have arrived at an understanding of the norms and values of democracy and are now being accused of backsliding—what you might call the Capitol syndrome. But many other countries have never got there. It is important that we think differently about the countries that have never got to the point where they had regimes that respected the norms and values of democracy.
When one thinks about sub-Saharan Africa, one is looking for something positive—that is to say, what are we going to do about it? Do we have any responsibility to do anything? If so, what will we do? Of course, that takes one back to the international organisations. In reading about the World Bank’s operations in sub-Saharan Africa, I get the impression that it is rather tired. It is not the World Bank I remember from 20 or 30 years ago.
The positives we need to find are headed by economic development. We know that if you want to have a reasonable regime, it is important to be able to collect some taxes and to have some public expenditure. If your economy simply does not support that approach, you are not very far along the road to having an acceptable regime. In thinking about acceptable regimes, it is risky to assume that the default position is our understanding of democracy. All the evidence shows that this is not the case and that there may be many other ways in which people will continue to think about their politics and their regime that do not conform to our understanding of the norms and values of democracy. We have to approach all this rather cautiously.
I want to cite two examples in sub-Saharan Africa: Burundi and Cameroon. They were both brought under German colonial control in 1884. At the end of the First World War, they were both taken away from Germany and, by a co-ordinated effort of the League of Nations, one became Belgian and one a mixture of French and English. We now have virtually no relationship with Burundi, but we have a sanctions regime. It seems to me that to apply a sanctions regime to Burundi, which is similar to that we might apply to Russia, does not make any sense. I think the British Government have forgotten Burundi. On Cameroon, I have just one last sentence: there is conflict there, again created to quite a large extent by the League of Nations decision after the First World War and by independence and what happened in 1971. I think our Government’s reaction is that Cameroon is too complicated for us to have an opinion about what should be done there. After Brexit, we now need some opinions about what needs to be done in sub-Saharan Africa.
My Lords, the speaking time for Back-Benchers is five minutes. If we go over that, we will cut into the time that the Minister has to respond, so can we please keep an eye on the clock?
My Lords, Bain & Company presents itself as a reputable global consultancy operating across the world, with an office in London and recent contracts worth £55 million with the Cabinet Office alone. Yet in South Africa, Bain brazenly assisted former President Jacob Zuma to organise his decade of shameless looting and corruption, with the company earning fat fees estimated at £100 million—or 2 billion rand—from state institutions.
South Africa’s State Capture Commission, a judicial inquiry headed by Deputy Chief Justice Zondo, indicted Bain’s work with the South African Revenue Service as “unlawful” and recommended that all its South African public sector contracts be re-examined with a view to prosecution. At the time, Bain South Africa’s work was endorsed by both its London office and its US headquarters in Boston. Bain has also been disgracefully smearing Mr Athol Williams, a key whistle-blower praised by the Zondo commission who recently had to flee to the UK for his safety.
Given the scandalous collusion of Bain UK and Bain USA. I am asking that the UK Government and the US Government immediately suspend all government contracts with Bain. I wrote three weeks ago to the Prime Minister requesting this, and he has just replied stating that the Cabinet Office will
“look into this matter with urgency”
and the Chancellor of the Duchy of Lancaster wrote to me yesterday saying that the Government will be contacting Bain. I hope that those contracts will be suspended and that that is the case for all public sector contracts in the UK.
However, Bain’s shamefully shady behaviour is just the tip of the iceberg. The prodigious looting, corruption and money laundering under former President Zuma would not have been possible without the complicity of Bain, KPMG, McKinsey, SAP, Hogan Lovells and the banks HSBC, Standard Chartered and Bank of Baroda. Those fee-clutching global corporates and turn-a-blind-eye Governments from London and Washington to Dubai, Delhi and Beijing helped to rob South African taxpayers, contributing to a catastrophic loss of South Africa’s GDP of around one-fifth. Economists estimate the full cost of the Zuma state capture to be a monumental £750 million or 1.5 trillion rand. The Government’s total annual expenditure is just 2 trillion rand annually. These global corporates all obtained sweetheart state contracts, which helped Zuma’s business associates, the Gupta brothers, to loot the state. Global banks such as HSBC, Standard Chartered and Baroda transferred this looted money through their digital pipelines to less regulated jurisdictions such as Dubai and Hong Kong, or British Overseas Territories in the Caribbean, to then clean the money by mingling it with other funds, disguising its origins and enabling it to be more easily spent.
Lawyers and accountants assisted the Guptas to set up complex shell, or front, companies, hiding their true owners—the Guptas or their associates—and enabling money to be moved to a country where there is low transparency. Dishonest audits left suspicious transactions hidden. Estate agents received laundered money during Gupta property purchases. Global brand names from KPMG to McKinsey, from HSBC to Standard Chartered, all profited while the Guptas hid and spent their stolen funds that could otherwise have been destined for essential South African public services, job creation or infrastructure, leaving South Africa’s public finances near-bankrupted and its growth stalled.
I therefore find it completely unacceptable that Bain is licensed to operate commercially in the UK, the USA or anywhere else in the world—at least until it has repaid all its fees earned from the South African state during the Zuma-Gupta years and answered charges in the courts there. Unless the UK, US, Chinese, Indian and UAE Governments co-operate with each other, state capture will happen again, either in South Africa or other countries.
The truth is that international criminals continue to loot and money-launder with impunity through centres such as London, New York, Hong Kong, Delhi and Dubai. Ministers talk the talk on corruption but refuse to take the necessary tough action against guilty big corporations to stop it. Meanwhile, financial crime is estimated by the United Nations Office on Drugs and Crime, to be worth around 5% of global GDP, or $2 trillion, each and every year.
My Lords, I congratulate the noble Lord, Lord Browne, on mounting this debate. He has been absolutely tireless in promoting more international co-operation and co-ordination on all the really existential issues threatening the world in an extremely dangerous time for us all. This debate is a marvellous further step in that direction.
I also agree with my noble friend Lord Balfe that we need to start on this question of defeating the autocracies by looking at and repairing our own weaknesses in democracy. I agree with most of what the noble Lord, Lord Hannay, said on the same theme. I think I was a bit naive in agreeing with my noble friend Lord Balfe that there was going to be a non-partisan approach to these totally new issues, but I am afraid that was soon disabused. Maybe my naivety will have to be put aside.
We have to know what the weaknesses in the democratic pattern are in this digital age. About a year ago, the Cambridge Centre for the Future of Democracy produced an extensive and extremely alarming report examining the views of millennials and Generation X—the people born after 1990—who, by a large majority, delivered the view that they were losing faith in democracy. I think it was rather a general question. They did not really mean that they were against democracy; what they meant was that the systems of democracy that are around are not delivering for these people in the way that perhaps they did for my generation and those in between.
I therefore think we have to be ready to move outside the old western camp view of thinking and maybe search into Asia where, frankly, all the great growth, all the booming economies and possibly all the biggest dangers will be over the next 10 or 20 years, and see what additional lessons we can learn in a world that is no longer ideological in the old Cold War language, with neat ideological divides between the systems and so on. I do not think the world is at all like the sort of thing that George Soros was wrongly stating the other day, with two economic systems lined up against each other. The reality is that the economic, social and therefore political mixtures ahead, in all continents, will turn out to conform neither to the isms of the past nor to the clichés of 20th-century European political discourse.
Just as what we continue to call democracy in the West seems to many people not very democratic at all, so what the Chinese, for instance, call socialism is really not very socialist either. Wise leaders should avoid attaching the old ideological labels to either of these models and recognise instead that revolutionary technology has fundamentally changed the behaviour of individuals to one another, of businesses to one another, of economies and of nations. A new kind of populist connectivity is pushing its way through just about everywhere, regardless of the doctrines and labels to which officials continue to cling.
I was particularly supportive of the concept advanced by the Foreign Secretary, Elizabeth Truss, when she talked about the need for understanding the world in terms of networks, and in particular a “network of liberty” of like-minded countries broadly dedicated—not always succeeding—to democratic values in lining up a security and defence chain, as it were, against the outright flouters of democracy, which are obviously to be found in Moscow and Beijing. This is the new pattern, which I think we have to apply our minds to.
I would like to see a prize awarded to the genius in the vanguard of thinking who can come up with a new language to explain to, inspire and guide confused millennials and the younger generation just about everywhere. Just as our forefathers invented the words “capitalism” and “socialism” only a couple of centuries ago to describe the new industrial world emerging, so we need the same inventiveness to describe the digital world that has replaced it. It is a challenge for thinkers and leaders in both East and West.
My Lords, I congratulate my noble friend Lord Browne and begin with a Polish question. What is the difference between an optimist and a pessimist? A pessimist says things cannot get any worse and an optimist says, oh yes they can. We can surely apply that to the position of democracy today. There is certainly a recession, a backsliding.
Consider the position perhaps 30 years ago. We had the end of the Berlin Wall, which led to the dissolution of the Soviet Union and the Soviet Empire—
“Bliss was it in that dawn”—
and the end of apartheid in South Africa and, indeed, Namibia. It was the end of a chapter of colonialism. We had the time when the United States was the only hegemon and was not challenged by an authoritarian China.
A little later, there was the pent-up anger against autocrats which led to the Arab spring. Now, what is left of the Arab spring? Some may say, Tunisia, but the jury is out on Tunisia, and everywhere else where there was the Arab spring there has been a deterioration. The situation has changed very much indeed.
Secretary Blinken on his visit to Africa last year spoke of a “democratic recession”. There has been a series of military coups. There has been a series of civil conflicts in Sudan, Somalia and Ethiopia, and generally, as the Library notes show, reports from a series of well-respected international organisations illustrate that recession.
Even in Europe, there is a fragility in our democracies. In France, the 25 January edition of Le Figaro showed the disillusion with democracy there. Some 39% of the 11,000 French people polled would welcome an elected strong man, but more than 50% would welcome a government by experts, not by elected people. The majority thought that, on the whole, the political elite was corrupt. Perhaps the position in this country is less fragile—we do not have the Bonapartist tradition—but look elsewhere around Europe and see the position of illiberal democracy in Hungary and the position in Poland.
My second reflection is that the contrast between democracy and autocracy has never been so stark, but there is a continuum, with perhaps North Korea at one end and the Scandinavians at the other. It is a problem of more so, less so. To illustrate that, I invite noble Lords to look at the Council of Europe and the fact that Russia is there. Russia invaded Georgia in 2008 and Crimea in 2014, yet it is a member of this major human rights organisation. Even, alas, our Commonwealth has deteriorated, with most countries backsliding. The position in South Africa, certainly under Zuma and the state capture by Zuma and the Gupta brothers, has been well illustrated by my noble friend.
Finally, yes, there should be co-ordination but the D10 cited by the Prime Minister is clearly a non-starter, as the noble Lord, Lord Hannay, said. Co-ordination is important for Magnitsky, but the best response is not only soft power but also the question of leadership. On that, I would say that our leaders should be people of integrity and honesty. They should respect the constitution and the role of judges and parliamentarians. They should honour the international treaties they have signed and should adhere to the rules and regulations they have made. This is the best antidote to authoritarianism. We should look in the mirror ourselves, try to be a model, be vigilant, avoid the slippery slope and remember that dictatorships normally die through epileptic fits, democracies die by slow decline, often from the top.
My Lords, as the noble Lord, Lord Browne, set out so powerfully and as others of your Lordships have reinforced, the situation today is an extremely distressing and depressing one. Countries such as India, which once rightly took pride in its democracy, have shown increasing disregard for basic human rights. Countries such as Turkey, which once stood on the very threshold of the European Union, have similarly regressed. One could go on. However, I want to do something different. There is no point in working for a co-ordinated response to defend democratic norms and values unless we have confidence in those norms and values in the first place. Whereas their abiding validity would once have been seen as obvious and taken for granted, it is now in different ways being subtly undermined. There are several reasons for this.
First, there is the widespread relativism of our times: the view that one stance on life is as good as another, that truth in any serious sense is unobtainable and we cannot and should not make judgments about how other societies operate.
Secondly, there is the widespread feeling that attempts to bolster or create democratic regimes in other parts of the world have been failures leading to massive loss of life, and that we should no longer intervene elsewhere on the assumption that they need democracy.
Those two tendencies have come together in some minds to conclude that different societies just do things differently from ourselves and we should simply accept that. We should put aside the arrogance of liberal progressivism and not assume that other countries would be better off if they had what we have.
The salutary point in this critique is that we should put aside any sense of arrogance and acknowledge that our democracy is deeply flawed. We should also acknowledge that if we are simply talking about the way of life of another culture, whether it is Chinese, Arab or indigenous, of course we should acknowledge that people choose differently and that they do so all adds to the variety and richness of human existence. But when it comes to democratic norms, we are talking about something different. At its heart is the most fundamental value of all: the equal dignity and worth of every human being, whatever their gender, religion, race or sexuality. This belief, rooted in the Christian faith and built on by secular rationalism, is indeed foundational for Western culture but is, I believe—somewhat unfashionably today in some quarters—a universal truth. That is why we have the Universal Declaration of Human Rights and the range of other covenants and conventions that flow from it. That is the first point.
Secondly, there is the knowledge, derived of bitter experience, that state power has to be contained. It is this that led the great Reinhold Niebuhr to write that our
“capacity for justice makes democracy possible; but”
“inclination to injustice makes democracy necessary.”
It was a combination of these two factors—the equal worth and value of every human being and the need to protect him or her from the overweening power of the state—that led to the great human rights movement after World War II. The insight of those giants who brought about that achievement still stands today. Human rights and the democratic norms which go to protect them are not just part of a way of life which people are free to choose or reject as they prefer. They are, I believe, universal moral insights now, quite properly, expressed in legal norms. Of course, I am familiar with the Marxist argument, which has some truth in it, and excessive liberal individualism does indeed need to be balanced by the insight that we are social beings, and persons only in and through our relationship with other human beings.
Whatever flaws there are in our democracy—and they are manifold—and whatever lessons need to be learnt from ill-judged foreign interventions in the past, we should not give up on the idea that democratic norms and values are a real achievement and are worth aspiring to for all human societies, not because they are Christian or Western but because the insights they express and safeguard belong to humanity as such. It is worth making a co-ordinated response because they are worth defending, and they are worth defending not just in terms of practical political steps that can and should be taken but intellectually and morally against certain insidious currents which have the effect of undermining their universal validity.
My Lords, which keeps us awake at night—the prospect of a Chinese invasion of Taiwan or the prospect of a Russian invasion of Ukraine? Consider the disquieting possibility that both may happen on the same day by prearrangement. The noble Lord, Lord Browne, in introducing this excellent debate, spoke about the coming together of the two great illiberal powers. It is a very real coming together: the largest military exercise that the Chinese have been involved in with another country was conducted last year with Russian troops in north-western China, where J-20 stealth bombers were used. A signal went out that the two countries that have the most to gain from overturning the current world order and from a revanchist and autocratic alternative are working together. That same message has been heard on every continent and in every archipelago.
I spent part of last month in Pakistan. It was my first visit—it is a very beautiful country—but everywhere you see the spore of China, of the Chinese military and of Chinese society. Of course, Pakistan is a special case: its alliance with China goes back a long way, and it has always seen it as a counterweight to India. None the less, I was struck when I heard the Prime Minister of Pakistan, a man of very British sensibilities and education, saying that perhaps multiparty western democracy, which had been held out as the only alternative, was inferior to the more meritocratic Chinese alternative. I do not think we would have heard that 10 years ago, and certainly not 20 years ago. We would not have seen ambitious politicians learning Mandarin rather than English, or ambitious young army cadets studying at the People’s Liberation Army university rather than aspiring to come to Sandhurst.
Around the world, people hear the melancholy long withdrawing roar of western influence. We can sanction Lukashenko—it does not stop him kidnapping and murdering opponents or massing troops on the Ukrainian border. We can sanction Ortega—it does not stop him stealing the election in Nicaragua. The same has happened in Nigeria, in Burma and all over. The only part of the otherwise excellent speech by the noble Lord, Lord Anderson, that I would question is when he said that the jury was still out on whether Tunisia is a democracy. When I see troops in the streets and Parliament dissolved, I do not think that the jury is still out. The last country that could still have been held to be a success 10 years after the Arab spring has joined the rush to autocracy.
We should all guard against the availability heuristic—it is always possible to pick examples of what is going wrong—but it was interesting how the noble Lord, Lord Browne, began by giving an empirical assessment of how democracy is in retreat. In addition to the source that he gave, almost everyone who studies this says the same thing, including the Economist Intelligence Unit, Freedom House and the democracy index. Seven years of solid advance at some point in the past decade have stalled and gone into reverse. I want to explore why that has happened.
Of course, part of it is simply that people no longer care as much about what the western powers think; there has been a change in the balance geostrategically. Part of it, frankly, is due to the pandemic and the associated lockdowns—not just in the obvious sense that we gave up liberties, could not travel and were interned and so on, but in the more dangerous and insidious sense that a common threat of that kind tends to make people more authoritarian. It is a well-observed psychological phenomenon, whether it is a war, a plague or a natural disaster. People coming out of it become more intolerant of dissent and more demanding of the smack of firm government and strongman rule.
Perhaps the most disquieting thought of all is whether, in the scheme of things, it is not the last couple of hundred years of democratic and liberal advance that are the exception. All the things that various noble Lords spoke about—the kleptocracy, the institutionalised looting of state resources, the seizure of power by small elites—was pretty much how every civilisation was run for most of the last 10,000 years. The lot of almost every human being was servitude of one kind or another: back-breaking labour in the fields from dawn until dusk, while small elites systematically looted the state. We are exceptionally lucky to be here in a place and at a time when we have found mechanisms to keep the Government under control and when a measure of law and liberty can flourish, whereby we have elevated the rules above the rulers—but that is not the normal state of play.
I wonder whether we might be coming towards the end of a brief interglacial period between the long ice ages. That is why it is so important to keep educating and elevating the idea that process matters more than outcome, the rules matter more than the rulers and the individual matters more than the collective. That is why we should keep a sense of perspective in attacking different parties within a democratic system. If we lose sight of those precepts, the bleak landscapes stretch ahead of us, dark, cold and grim.
My noble friend Lord Browne of Ladyton has chosen an excellent Motion to table because democracy around the world is under threat and needs urgent action to protect it.
Never forget that modern kleptocracies rely on some of us here in the West to help them launder money. Lobbyists, lawyers and accountants in democracies keep kleptocrats in power, often by hiding their money in offshore tax havens, and get rich as a result. The United Nations Office on Drugs and Crime reports that the prevalence of these tax havens, many of them our dependent territories, and a general trend towards financial deregulation have made it increasingly difficult to identify and sanction criminal assets.
That brings me to a report from Chatham House—not a party-political organisation, I say to the noble Lord, Lord Balfe—which said that Boris Johnson’s Conservative parliamentary party
“may be open to influence from wealthy donors who originate from post-Soviet kleptocracies, and who may retain fealty to these regimes.”
The Conservative Party received £3.5 million from naturalised British citizens of Russian and Eurasian backgrounds between 2010 and 2019, and the volume of donations has increased.
Kleptocrats are cementing their power in the United Kingdom by cleverly forging ties with political and business leaders, creating charitable foundations, seeking the support of think tanks and elite universities, and buying prestigious commodities such as football clubs, as the noble Lord, Lord Wallace, rightly said. Access to these points of entry must be tightened. Sadly, Putin will not take our threats seriously if we allow this to continue. There is a growing need for action nationally and internationally.
For example, the US sanctioned Latvia’s ABLV Bank in 2018, which eventually led to the collapse of the firm, cutting off at least one source of funding for the North Korean Government. Europe also needs to follow the money. Restricting the flows of illicit finance that run through our markets and institutions, public and private, is key to tackling the threats posed by Russian electoral interference, Chinese competition and democratic backsliding in central Europe. We cannot tackle these challenges alone. The Inter-Parliamentary Alliance against Kleptocracy is an excellent example of how democracies are joining forces to make real progress against a rising tide of corruption, but much more needs to be done.
I want to highlight the case of Belarus. According to the Global State of Democracy 2021 report, Belarus is undergoing a year-on-year democratic decline, which is relatively rare. The only other countries where a similar trend was observed were Palestine, Côte d’Ivoire and the Central African Republic. According to Freedom House’s annual report, in Belarus:
“Political rights and civil liberties have become even more restricted than before, and democracy remains a distant aspiration.”
Russia, as we know, is using Belarus as a base to amass troops to threaten Ukraine. We have seen the effect of that; they are now within easy reach of getting to Kiev. Russia’s primary objective in Belarus is to avoid a colour revolution resulting in the installation of a new, pro-western, democratic Government seeking closer ties with us in Europe and NATO. All this is underpinned by Lukashenko’s autocratic regime. Libereco, an independent German-Swiss NGO dedicated to the protection of human rights in Belarus, reports that there are currently more than 900 political prisoners there, including women and men, young and old, from all strata of Belarus society. They only exercised their basic rights to freedom of expression and assembly and campaigned for a free and democratic Belarus.
According to Amnesty International, adopting political prisoners can have a hugely beneficial impact on their mental health and help to protect them from further abuse by the state. I am one of a number of UK Peers, including my noble friend Lord Griffiths of Burry Port, and MPs who have adopted a political prisoner: in my case, Stefan Latypov, who I keep in touch with to offer support and hope. I hope others here today will follow that example.
My Lords, the crisis in Ukraine has finally put on the front pages an inconvenient truth largely, if not deliberately, ignored by the Government. The safe haven and money laundering which the UK provides to kleptocrats and oligarchs sustains, enables and rewards pretty much any and every corrupt and autocratic regime on the globe. In 2016, the UK Government estimated that the amount of corrupt money flowing into the UK had reached £100 billion a year.
The Government introduced legislation, particularly the Proceeds of Crime Act, to tackle some aspects of economic crime transacted by what I might call traditional organised crime, but they have notably avoided the key pieces of legislation necessary to stem the laundering of money from oligarchs and kleptocrats. Their money is laundered particularly through UK property. Transparency International has identified at least £1 billion in property bought with suspect money from Russia alone. That will never be stemmed until we have legislation to require not just a register but a public register of the beneficial owners of property in the UK, enabling civic society and activists across the globe to aid our woefully understaffed and fragmented enforcement bodies and regulators, described by Chatham House as "weak and under-resourced”. That legislation was fully drafted weeks—possibly months—ago but, for some reason, the Government have chosen to halt it. Perhaps the Minister would tell us why. We also need proper verification of the Companies House public register of the beneficial ownership of companies. Will the Government tell us when we can expect its introduction—we have been waiting for months—and the other reforms of Companies House regulations?
Other gaping loopholes exist in some of our overseas territories and crown dependencies which do not yet have public registers of the beneficial owners of companies or property. We in the Lords thought that we had, in recent Financial Services Acts, fixed this problem, but the Government have used every strategy they can muster not to force changes. Will the Minister now update us? While UK property is at the heart of what is now known globally as the London laundromat, the other locations which make up the British financial family are almost as important to the kleptocrats.
The Americans have stopped being polite about the problem. The Center for American Progress, very close to the Biden Administration, has called for a joint US-UK counter-kleptocracy working group; in other words, they just do not trust us to take effective action on our own. I ask the Minister: will we agree to it? I suspect we have all read this quote:
“uprooting Kremlin-linked oligarchs will be a challenge given the close ties between Russian money and the United Kingdom’s ruling Conservative party, the press, and its real estate and financial industry”.
However, Government laxity, some might say collusion, is far from the only problem. As other have said, we need to go after the enablers—I quote the CAP again—
“the law firms, accountants, real estate firms, and investment firms that all profit from integrating Russian oligarch wealth into the West.”
Will the Government introduce a “failure to prevent” to stop such enablers? Speaking of prevention, will the Government end their disgraced golden visa scheme, described by Chatham House as a national embarrassment?
Free ports are now being introduced to the UK, with a proposal that there will be a register of beneficial ownership of businesses in them but that it will not be made public. Will the Government accept my amendment on this issue, recognising the importance of a public register, not a secret one, particularly given our weakened enforcement agencies? Will they take up my Private Member’s Bill to create an office of the whistleblower to provide proper protection for whistleblowers, who are presently ruined by their disclosures, but whose actions are vital to effective enforcement against powerful people such as oligarchs and kleptocrats?
My Lords, we are all indebted to the noble Lord, Lord Browne of Ladyton, for initiating this important debate. It is a reflection on our times that it has become commonplace to compare the current geopolitical situation to the 1930s—a decade when autocrats and populists manipulated public opinion, preying on insecurity rather than hope, and drew their personal power from the fears, cynicism and prejudices that divide people, rather than the qualities of compassion and generosity that can unite humanity. It is equally commonplace—we have rightly heard it during our debate today—to call for politicians to take a more co-ordinated response, especially when nations disregard international laws and conventions. Ministers regularly assure us that the Government consult our partners when international norms are violated yet, in practice, global Britain too often speaks alone.
By contrast, Beijing’s increasingly effective tactics are to single out and punish those nations which dare to contradict the Chinese Communist Party’s increasingly paranoid narrative—banning exports from Australia, incarcerating innocent Canadian citizens without due process, or intimidating Lithuania—without even talking about what has happened in Hong Kong, Xinjiang or Tibet, or its subversion of international institutions, from the United Nations Human Rights Council to the WHO.
So what might we do when institutions are subverted? By way of example, might the United Kingdom lead by suggesting to its partners that we join an informal and temporary coalition of countries to simultaneously recognise on the same day the sovereignty of Taiwan—a vibrant and brave democracy which has been referred to during this debate, where the rule of law is upheld and diversity and difference are respected? Does the Minister agree that there would be relative safety in numbers if 40 or 50 nations found the courage to make a joint announcement recognising the sovereignty of Taiwan, thereby with one diplomatic gesture turning the tables on the CCP’s bullying posturing, or does our fear of losing diplomatic face immobilise us in the face of tyranny? I hope the Minister will commit to exploring a much more robust approach with our partners.
As we have heard, this is beyond urgent. During exchanges in the House on Monday, I specifically asked the Minister about the co-ordinated action which is greatly needed to face off the Kremlin’s aggression and metamorphosis from managed democracy to outright dictatorship. If Russia does invade Ukraine, does the Minister agree with what the noble Lord, Lord Hannan, said earlier that it is not beyond the bounds of possibility that Beijing might seize the chance to take one or two of the small islands around Taiwan, or indeed Taiwan itself? There are memories here of the Sudetenland and Czechoslovakia and the enfeebled procrastination that emboldened the dictators of the day. Our piecemeal condemnation after the fact will have no more impact than the proverbial wailing and gnashing of teeth. The time for mass recognition of Taiwan’s sovereignty by the free nations of the world is now.
In this ugly and deliberately intimidatory environment, do we not have one particularly cost-effective weapon in our soft-power, smart-power armoury: the BBC World Service? It is among Britain’s greatest exports, but it is also the most cost-effective weapon in our soft-power armoury. Do memories of beleaguered peoples—from the French Resistance to the dissidents of the Soviet Union—not remind us of the huge importance of sustaining World Service broadcasts? After all, it was Mikhail Gorbachev who admitted that even he had listened to the World Service during the Cold War in order to learn the truth. In the Far East, especially in Hong Kong, where champions of democracy are incarcerated or forced into exile, and in Taiwan, mainland China and North Korea, the BBC remains a link with truth. I hope the Minister will agree that millions of people who are being bombarded by poisonous propaganda each day rely on the World Service to cut through the fog of misinformation and assure us that funding for the World Service will keep pace with inflation.
To end, it was Robert Kennedy who famously described how each tiny ripple of hope, when joined with others, could create a current which could sweep down even the mightiest walls of oppression. When faced with the spectre of totalitarianism, we must surely project the message of hope—the message we saw in 1989 when the walls came down in Berlin—to all those who suffer at the hands of dictators and despots and who yearn for the freedoms, privileges and liberties which we all enjoy.
My Lords, we are indeed grateful to my noble friend Lord Browne for giving us this opportunity to discuss these important matters. I hope that he and other noble Lords will forgive me for starting in a different place from others, for I lived for 10 years in an autocracy, a kleptocracy with populism pretty much reigning on all hands. It was the 1970s; it was François Duvalier, followed by his son Jean-Claude. I met Papa Doc twice—he died shortly afterwards, but I do not think there was a causal link. Kleptocracy was certainly something I was more than familiar with. The school I was deputy head of had educated Jean-Claude Duvalier. We knew all his inside helpers. I taught members of the Tonton Macoute and of the diplomatic corps, as well as people with no money whose fees were paid by those who had stolen it from somebody else.
In the time available I must speak in headlines, for the democratic world has reduced Haiti to the frazzled rump it is now. From the time of Haiti’s independence, France took it ill and imposed an indemnity that independent Haiti went on paying back until relatively recently—just 20 or 30 years ago. The Americans have played a pretty bad hand in Haiti. I can assure your Lordships that an occupying force of redneck southern marines policing the first black republic in the world left its mark. Franklin Delano Roosevelt, then Assistant Secretary of the Navy, rewrote the Haitian constitution and set up a rigged plebiscite in order that foreigners, previously not allowed to own land, could. American corporations rushed in. Sisal and sugar were exploited, as were minerals and other things. The Haitian national debt was taken from the Bourse in Paris and sunk in Wall Street, and used to leverage loans for a railway system that Haitians did not want but the sugar industry run by American corporations certainly did.
Denmark, Spain and, I am afraid, the United Kingdom played their own bit parts—cameo parts—in the reduction of Haiti to its present state. In particular, a book by a British ambassador in the 1870s vilified Haiti and fed the voyeuristic tendencies of a British readership for a cannibalistic, voodoo-dominated state, which Haiti certainly is not and never has been. I have briefed five consecutive British diplomats who have gone on to serve on the island of which Haiti is a part, and they need to know the full story of exploitation, rape and violation. That is an important aspect of what we are considering now.
I must very quickly say that since the Duvaliers left in 1986, it has been downhill all the way: a President assassinated last July, 250,000 people dead in an earthquake in 2010, 2,500 dead last August in another earthquake, gangs, drugs, insecurity, no democratic norms and no judiciary or criminal justice system. It is simply a mess. I am helping to run the campaign of a man who I hope will soon be the new President of Haiti—God, what a job he will have. After a visit I helped to organise to eastern Nigeria for 12 Haitian leaders just two weeks ago, he was arrested in Miami on his way back to Haiti, interrogated and accused of going to Nigeria to have dealings with Boko Haram—which is ludicrous fantasy—to assassinate his character ahead of the elections, because the Americans certainly do not want him.
All I can say at this stage is that I have become convinced of the situation. I have used Haiti for illustrative purposes because we can think of other people across Latin America and other parts of the world who have been favoured by democracies but turned out to be the kleptocrats and autocrats. With the permission of my noble friend Lord Browne—perhaps I will not ask his permission but impose it on him—I may turn this around and say that I would have loved to have moved that the Grand Committee take note of the impact of countries with democratic norms and values in creating autocrats, kleptocrats and populists.
My Lords, strategic litigation against public participation, known as SLAPPS, is abusive lawsuits pursued with the purpose of shutting down freedom of speech. They have been used against journalists, media outlets, whistleblowers, activists, academics and NGOs that speak out on matters of public interest.
The UK has become a global hub for financial crime and corruption. As the Prime Minister would say, we are world leading. My noble friend Lady Kramer referred to £100 billion a year. Along with that, our courts possess the tools to shut down reporting on such matters—cases for libel taken not for their legal merit but for the effect of silencing a critic by locking them into a long legal struggle. We have developed a class of lawyers who call themselves reputation managers.
Chatham House reported on the Abramovich action against the journalist Catherine Belton and her publisher HarperCollins. She had lived and worked in Russia for many years and had claimed in her book Putin’s People that Abramovich had purchased Chelsea Football Club at the behest of the Russian president Vladimir Putin. A statement from the firm Harbottle & Lewis, solicitors representing Abramovich, claimed that Belton’s book, “falsely alleges that” Abramovich “acted corruptly” —a claim that was struck out in the early part of those proceedings. However, a further three Russian billionaires and the Russian state oil company Rosneft followed Abramovich in filing civil claims against HarperCollins, Belton’s publishers. It is much to their credit that they stood by their author and the claims were apparently settled satisfactorily.
The chilling effect of this type of litigation is most visible in the threat of action rather than action itself. Karen Dawisha, the author of the 2014 book,Putin’s Kleptocracy, was forced to change publishers due to legal concerns in the UK. Her publisher, Cambridge University Press, dropped her on the grounds that those implicated would sue and that the disruption and expense would be more than it could afford. The book was published in the US. There are numerous examples. The Maltese journalist Daphne Galizia, who was murdered by a car bomb, was facing 47 libel actions brought by Maltese politicians and others for her unbending and brave journalism exposing corruption. After her death, her family accused Mishcon de Reya, a British firm of solicitors, of “hounding” their mother.
There are rules of court that make it possible to strike out actions in this country but this power is not used often enough. We have fallen behind. Other countries, specifically Canada, have introduced primary legislation to deal with the problem. Its Act with the section, Prevention of Proceedings Limiting Freedom of Expression on Matters of Public Interest (Gag Proceedings), was recently approved and upheld in the Supreme Court of Canada.
Following that Canadian precedent, I have drafted a Bill to reduce the risk that participation by the public in debates on matters of public interest will be hampered by fear of legal action. The Bill would give a judge the power to strike out an action at an early stage where the respondent satisfies the judge that the proceedings arise out of a communication that relates to a matter of public interest. The burden would then shift to the claimant to show that the proceedings have merit, the respondent has no defence and that the communication is sufficiently serious that it is in the public interest for it to proceed. In determining that public interest, the judge would consider the right to freedom of expression, the right of public participation in democratic discourse, the chilling effect of the proceedings and any disproportion between the resources deployed by the claimant and the amount of damages that might be awarded. The court would have power to award damages if the proceedings were brought in bad faith and award costs against the claimant on an indemnity basis. I hope that your Lordships will hear more about this Bill and I look forward to the Minister’s comments.
My Lords, while in preparation for this debate, for reasons I cannot explain, my phone decided to throw up some old pictures that I had kept in archive. A particular photograph came from 1975, of Idi Amin forcing white diplomats to bow down to him to give him subservience and obedience and take an oath of allegiance to his Government. We easily wrote him off then as a tyrant, an autocrat and a man who was intent on showering shame on those he despised and manipulating and destroying their lives.
Well, here we are many decades on, and we have recorded information this week that the former recent President of the United States spent the last weekend in Texas, assuring those who bowed down to him a year ago that he will pardon them when he returns to office and release them of the charges for which they were accused for leaping up on Capitol Hill to destroy the stable democracy of the United States, and that he spent weekends while in the White House destroying and ripping up official papers which members of his Government, in Civil Service terms, literally sellotaped together to provide to the inquiry in Washington.
We so easily used to point at African leaders as despotic and despairing and we now have them in abundance in the West. We have to learn to take account of what is clearly a major failure in our ability to display democracy to the rest of the world when we cannot see it in the places we once revered or even consider home.
I have reflected strongly on this issue, largely because I have felt a deep sense of despair at the state of our own country’s affairs. Before I leave them, I remind noble Lords who are followers of American political writing of a quote that appeared in the Baltimore Evening Sun on 26 July 1920—100 years ago—written by the leading political author HL Mencken:
“As democracy is perfected, the office of the President represents, more and more closely, the inner soul of the people. On some great and glorious day, the plain folks of the land will reach their heart’s desire at last, and the White House will be occupied by a downright fool and a complete narcissistic moron.”
In subsequent writings, HL Mencken went on to explain that
“the inner soul of the people”
was corrupted when the public were lulled into indulgence and indifference by consistent pleasure and abundant choice. He said that this allowed them to take the low road of ease and disengagement, which he called the cul-de-sac of hopelessness. If we care about democracy, we have to ask ourselves: what are we allowing people to be and to do carelessly—and social media fits well into that paradigm—that causes them to be lulled into persistent pleasure and indulgence?
While we have been here, in the course of this debate, the Prime Minister’s chief adviser, Munira Mirza, has resigned, accusing the Prime Minister of slurs against the leader of the Opposition, saying that:
“There was no fair or reasonable basis”
for the assertions made at the Dispatch Box in the House of Commons. She continued:
“This was not the normal cut-and-thrust of politics; it was an inappropriate and partisan reference to a horrendous case of child sex abuse. You tried to clarify your position today but, despite my urging, you did not apologise for the misleading impression you gave.”
How can we preach democracy and authoritative, intelligent leadership to a world that now so desperately needs it when those at the centre of our own politics cannot seem to display it?
These things are inconsistencies, and I wonder whether the Minister might reflect when he makes his reply on whether he believes the assertions in the Economist of the last week that at the heart of our problem is the “childish lack of seriousness” at the heart of government and the failure of the Government to tell consistent truth. The Economist says:
“Treating voters as dopes to be bought off with bombast is a feature of the demagoguery that Mr Johnson rode to power. It is an example of the contempt with which populist leaders treat the people they govern. So, alas, is the other trait that has infected post-Brexit Britain: lying”,
consistently in public. We cannot preach democracy to the world if we cannot deliver integrity at home.
My Lords, the noble Lord, Lord Balfe, began this debate by saying that he hoped that it would not become party political. I would agree with him, in that although the geography of this place divides us into two sides, there are more than two sides in British politics. I will say that this problem is much broader than one side of government, although I very much agree with what the noble Lord, Lord Hastings, just said: things have got much worse in the past decade.
None the less, we have spoken a great deal about golden visas, and I would point out that they were introduced in 2008. There was what is known as the blind faith period, when checks on applicants and the source of their wealth were done neither by the banks nor by the British Government, and more than 3,000 people came in that period between 2008 and 2015. We have to say that responsibility for that sits on both sides, if we divide the House that way in your Lordships’ House. This is not a two-party issue but a systems issue; we have a broken system here and around the world.
I thank the noble Lord, Lord Browne, for introducing this debate so powerfully and for giving us the chance for such an interesting discussion. In his introduction, he focused on the financial sector, a haven for dirty money where reputations are laundered and political donations accepted. I am really pleased to see the turnout today, and I contrast it to the kind of turnout that we saw in debates during the passage of the Financial Services Act, when frequently we were debating controls on the financial sector, controlling legislation, and we were lucky if half the number of people who are in this Room today were involved in those debates. I note that at Second Reading of that Act, the noble Lord, Lord Agnew of Oulton, said:
“We need to show to the rest of the world that this will be a soundly regulated environment.”—[Official Report, 28/1/2021; col. 1877.]
We know how the noble Lord thought that went along.
The noble Lord, Lord Howell, talked about two economic systems lined up against each other. Of course, the world has only one economic system now: capitalism. I am not a Marxist—I do not believe that the superstructure is determined by the base, and that is very clear in that we have a base of capitalism and the structure around the world that we have now. If we look at that not philosophically but practically, the Russian model was developed on the basis of advice from US and UK advisers—the kleptocratic model. The Chinese adopted the capitalist market system underneath their own political frame. So where we are today is not a degradation but a continuation. The incredibly powerful speech of the noble Lord, Lord Griffiths, spelled that out so beautifully.
Power and resources have, from the colonial period through the post-colonial period to today, been held in the hands of the few to the impoverishment of the many. We have treated nature as a mine and a dumping ground. Today, to bring it up to the current day, not all the superyachts being built and sailed around the world are sailed by kleptocrats and autocrats; quite a lot of them are people who are residents of our own countries.
My next point is on the question of them and us. The authoritarian tendencies that we see in other parts of the world are to be found right here at home as well. What are typically described as liberal democracies are neither liberal nor democracies. If we look at the treatment of minoritised communities and indeed of women by our police forces, and at the treatment of desperate refugees by the Home Office hostile environment, that cannot be described as anything but authoritarian. To quote the late feminist social theorist bell hooks, we live in a “white supremacist capitalist patriarchy.” This is a system that benefits the few and represses the many.
The noble Lord, Lord Howell, said that systems are not delivering and perhaps we should look to Asia and other places. I suggest that we should instead look to the ignored people in our own societies, who are repressed, oppressed and dispossessed in our own societies but who are building up from the grassroots alternatives and different ways of doing things. If we look at the global frame of freedom and liberty, where do the ideas come from? If we go back to the human rights framework, that was very much driven by campaigning from civil society that forced the introduction of those things that built up towards the UN and the human rights framework. More recently, looking at Magnitsky-style sanctions, where did they come from? They come from civil rights campaigning that was then implemented by government.
In conclusion, we are responsible for the state of the world today. To prevent a world dominated by autocrats, kleptocrats and populists, here and abroad, do not look outside—look inside.
My Lords, as we have heard this afternoon, there is little doubt that democracy has been on the slide: the recent report from Freedom House pointing to 15 consecutive years of declining freedom and democracy makes a depressing read. I wish to focus on the decline in democracy rather than the rise of autocrats and kleptocrats, specifically during the last two years of the global pandemic, when the ability—or, should I say, appetite—of the so-called leading democracies to collaborate and work together for the greater global good has largely evaporated.
As the noble Lord, Lord Hastings, so eloquently stated, the rise of populism and nationalism among major democracies was evident in the years running up to the pandemic. The election of Donald Trump in the US heralded four years of division—aided and abetted by social media—and a combative approach to the UN, NATO and many other multilateral organisations. Here in the UK, a deeply polarising Brexit referendum, where quality of debate, trust and objectivity took a back seat, has been followed by two to three years of an equally divisive Johnson Government, where—to put it very mildly—domestic issues have pushed critical global issues into the sidings. Sadly, there has been little sign that other countries in the G7 or indeed the G20 have stepped up.
I shall briefly compare and contrast the world’s response in 2008 to the global financial crisis to the current response to the global pandemic. Facing a pyramid of toxic debt from European and American banks, the G20 stepped up—with our Prime Minister at the time, Gordon Brown, to the fore—to assemble a $1.2 trillion-rescue bailout to avert the impending collapse of the world’s financial system. Some 14 years on, and we are in the midst of a far more serious world crisis. The IMF estimates that the damage to the global economy wreaked by Covid-19 will reach $12.5 trillion by 2024. It could be considerably more than that. In humanitarian terms, the pandemic numbers are even more chilling: nearly 6 million deaths so far, 160 million people dropping below the poverty line, hundreds of millions of children missing out on education, and tens of millions more added to ever-lengthening waiting lists for critical—and in many cases life-dependent—operations.
The tragedy of this is that the cost of vaccinating the world does not run into trillions; far from it, the figure is more like US$25 billion to US$50 billion. That is little more than 2% of the cost of the banking bailout and less than 0.5% of Covid’s estimated economic damage but, with wealthy nations focusing on their domestic vaccination programmes, it has been left to a critically underfunded COVAX to act like a charity, begging for vaccines to inoculate middle and lower-income countries. It is way behind its target of vaccinating 70% of all adults by September this year. The 1 billion jab milestone was finally reached in January, whereas 2 billion vaccines had been touted as a target for the end of last year. Currently, 3 billion adults across the world are totally unvaccinated.
Where is the leadership and collaboration from the so-called leading democracies? Where, indeed, is global Britain and what are the prospects for foreign secretary Liz Truss’s call at Chatham House in December for
“a network of liberty that spans the world”?
Vaccine inequity leads to a disturbing form of vaccine diplomacy, with China and Russia to the fore. Beijing has granted 53 countries free shipments of vaccines, including Pakistan, the Philippines and many countries in Africa. By the way, those countries are receiving the Sinopharm and Sinovac jabs, which evidence strongly suggests produce a much weaker immune response than the mRNA vaccines we all have here.
Sadly but, perhaps, inevitably, Covid-19 has presented autocrats and leaders in countries such as Venezuela, Belarus, Serbia and Sri Lanka with the excuse further to clamp down on civil liberties. The title of this debate raises the case for a co-ordinated response by the United Kingdom and her allies. Vaccinating the world surely provides that compelling case.
My Lords, I hope the noble Baroness, Lady Bennett, will accept a cup of tea to serve as an apology for my jumping up before time, as I do to all noble Lords for speaking in the gap, but will speak for no more than two minutes.
Democracy stands for accountability to the people, expressed by popular mandate. The noble Lord, Lord Browne, drew attention to the upcoming meeting between Presidents Xi and Putin: a joint security statement will be forthcoming. I suspect that it will be a statement of non-interference in each other’s internal affairs. While both aspire to a different form of communism, an alliance between the two will attract others into an axis—Iran is the most likely candidate—driving a wedge between two forms of governance: democracy over autocracy.
Leading on from that, we have just witnessed events in Kazakhstan. During the time of his presidency, it was said that President Nazarbyev commanded great popular support. Fast forward and, with the recent mayhem, it is abundantly clear that that support was entirely artificial. Autocrats do not have the support of the people, which is why an exit route must be found whereby they should be encouraged to leave, otherwise they will surely stay. A way must be found for free and fair elections as the only solution in everyone’s best interest.
My Lords, I declare an interest as chair of the UK board of a global peace-building charity, Search for Common Ground, and am an associate with Global Partners Governance, a UK-based not-for-profit focusing on supporting representative politics. During the February recess, I shall be in Baghdad and then Beirut, working with those wishing to strengthen their Parliaments. The Minister knows of my declared interest in Sudan and the retrograde step of moving away from the transition to democracy there. In all those three countries, brave young people and, primarily, women have been in the vanguard of supporting the basic and fundamental democratic norms that we are debating today. I commend the noble Lord, Lord Browne, for bringing this vital debate to us today. Far too many people this year alone, as well as last year, have lost their life fighting for a cause which we here take for granted.
The noble Lord, Lord Hannan, referenced Tunisia. Literally just before this debate, I was on a call with our ambassador in Tunisia through the Inter-Parliamentary Union. We discussed the retrograde step of military courts being used against civilians, the displacement of opportunities for many people and the move away from a parliamentary system. That is just one example of global goal 16—supporting institutions and building the rule of law—now under assault.
The debate seems to be broken down into three broad areas: the global counter-democracy movement towards absolute rulers, theocrats and autocrats; the lack of a coherent and credible UK approach to counter it; and the urgent need to clear our Augean stables here at home. A reliable indicator, the democracy index, states that only 8.4% of the world’s population live in a full democracy, with more than a third under authoritarian rule. My noble friend Lord Wallace highlighted the sweep of those who wish to maintain degrees of authoritarianism and absolute rule.
The UK’s trade with China, to give one example, has doubled over the last decade. We now have a trade deficit with China of £40 billion—unprecedented in history—and are seeking ever-increasing foreign direct investment from the Gulf states into the UK. What leverage do we have in reality against those we seek to build a “network of liberty” against? These are hollow words when we are dependent on many of them. As my noble friend said, the silence on democratic norms in the Gulf is matched only by the volume of the arms we sell there.
The noble Lord, Lord Londesborough, mentioned the pandemic, and in many ways he is absolutely right; it has exacerbated these areas. Not only is there vaccine nationalism and condescension for many countries, but we slashed our development co-operation at the height of the pandemic. In many respects, we are not a leader in this. But the pandemic has also had deeper elements that should trouble us: data harvesting of many populations, with data now a commodity to be traded as well as a tool for Governments against their people; open-ended emergency powers; and fraud in the response, which we hear of at home. It was right to mention the governing party having a VIP stream for contracts that were not made public, as well as youth displacement and other challenges.
My noble friends Lady Kramer and Lord Thomas highlighted that here at home we do not lead by assertion; we have inaction. The assertion that we are ridding London of its reputation is not matched by action. The world’s leading laundromat status for London is a stain on our global reputation. I have been to too many events around the world to count at which UK Ministers have sought to persuade other countries to crack down on corruption, only for people in those countries who are desperate to do exactly that to say to me and others that London is one of the key problems and the greatest facilitator of all.
It is remarkable to me that President Xi, Putin and other autocrats say their style is no different from that of our new western leaders, as the noble Lord, Lord Hastings, indicated. They say they are not hypocrites and would not ask them to do anything that they would not do.
The noble Lord, Lord Balfe, asked us not to be partisan. Let me just quote from the resignation letter of Munira Mirza, the Prime Minister’s former head of policy, who resigned today:
“This was not the normal cut-and-thrust of politics; it was an inappropriate and partisan reference to a horrendous case of child sex abuse … you did not apologise for the misleading impression you gave.”
In too many areas we are now using a playbook that autocrats and others we seek to move away from are using. We will never be a global Britain if we reject the corrective of seeing ourselves as others see us. The tragedy in all this is that we in our country, which I am desperately proud of, in many areas have built the norms of democracy and supported others in that great ambition, but we are not offering more. Our actions, and not assertions, are playing into the very hands of those we are concerned about in this debate.
My Lords, I, too, thank my noble friend Lord Browne for his excellent introduction to a wide-ranging debate. I also thank all noble Lords for raising such important issues.
As we have just heard, the UK has had a pivotal role in promoting globally the rule of law and democratic values through multilateral institutions, as a permanent member of the Security Council, as a significant player in NATO and, as the noble Viscount, Lord Eccles, reminded us, as a principal contributor to the World Bank and IMF. We should also not forget our leading role in promoting globally the UN target of spending 0.7% on ODA, and the leadership role we played in initiating the UN’s global goals, which established a reputation for the United Kingdom as a trusted partner across the world.
Our influence is not restricted to relationships with Governments. As the noble Lord, Lord Alton, said, our renowned institutions such as the BBC World Service, our universities, as well as the export of music and other cultural assets have given us huge soft power that we should not underestimate. However, I should say to the noble Lord, Lord Balfe, that the ingredients of a thriving democracy are not limited to Parliaments and parliamentarians. Civil society organisations such as women’s organisations, charities, faith groups, trade unions and other organised communities have all demonstrated their role in defending democracy and human rights.
When nations fail in their most important task of providing safety, security and freedom for their people, it is always civil society that leaps first to their defence. As the noble Lord, Lord Howell, highlighted, the Foreign Secretary said in her Chatham House speech that efforts to build a “network of liberty” must be firmly anchored in human rights and civic freedoms.
We must strengthen our ties with civil society, too. Unfortunately, there was little of substance on this in the Integrated Review, a situation that I hope will be corrected in the development strategy due in March. Clearly, in promoting our values we should work with our democratic allies bilaterally and multilaterally through the UN and other institutions. However, as my noble friend Lord Browne said, we do so against a backdrop of a series of states falling backwards into autocracy, kleptocracy and populism, and led away from the principles that have defined us as a country. As the noble Lord, Lord Hannay, highlighted, it is vital—I repeat, vital—that our words match our actions both at home and abroad.
The noble Lord, Lord Londesborough, reminded us of the Freedom House reports. Other democracy indices show that autocracy has been spreading for the past 15 years. That was recognised in the Integrated Review, which outlines how the UK will respond, including through the Westminster Foundation for Democracy and other organisations that support good governance and civil society around the world.
We talk about how important that is, but my understanding is that the WFD’s funding has been cut. Surely, at this time, it should be increased to support the fight against autocrats—and, as the noble Lord, Lord Purvis, said, at a time when global Britain, which led the way on 0.7%, cuts that and breaks the law. I hope the Minister will talk about how we will return to 0.7%. We have also seen the cuts to the BBC, the very thing that the noble Lord, Lord Alton, highlighted. The impact on the World Service will be disastrous, particularly in Russia and Ukraine, where it plays a really important role.
On the borders of Ukraine, we can see all too clearly that autocracy is a danger to global security. Russia’s aggression towards its neighbour is a product of a political system that also starves people of their human rights. The United Kingdom should be a more confident supporter of a free civil society in Russia while also acting domestically to confront those who attempt to export their kleptocracy through illicit finance.
I remind noble Lords—as I did earlier in the week—that a 2018 report by the other place’s Foreign Affairs Committee warned that
“turning a blind eye to London’s role in hiding the proceeds of Kremlin-connected corruption risks signalling that the UK is not serious about confronting the full spectrum of President Putin’s offensive measures.”
That is so true, as we have heard in the debate today. Like the noble Lord, Lord Wallace, I would like the Minister to answer the questions I put to him on Tuesday on the full implementation of the ISC Russia report. Also, when are we going to properly tackle the scandal of how 700 Russian millionaires were fast-tracked for British residency via the so-called golden visa scheme? The Foreign Secretary’s response on Monday was not satisfactory, and I hope the Minister can properly deal with that. I also repeat the call: when can this House expect to consider the economic crime Bill, which is such a vital tool in addressing these issues?
Following President Biden’s virtual summit for democracy last year, what steps have Ministers taken to mark the agreed year of action? Since the summit, President Biden has spoken of the need for political leaders to look inwards at how they can strengthen democracy at home, but under this Government our norms and standards have been undermined. The criminalisation of peaceful protest under the policing Bill was just one example. They lessen our legitimacy to stand up for democracy globally, which is vital.
As the noble Lord, Lord Purvis, said, our leaders need to uphold those standards. The disgraceful attack on Keir Starmer by Boris Johnson has resulted in his own director of policy resigning today. I hope the Minister will be able to address the contents of the letter that she wrote to Boris Johnson; it actually says why it is important that we uphold those standards.
The United Kingdom should be a proud champion of democratic principles and standards, and their promotion should define our foreign policy—but we must also invest in those standards and in democracy at home.
My Lords, I first thank all noble Lords for their participation in what has been an excellent and, as ever, informed debate on a subject which—as I said to the noble Lord, Lord Browne—was all-encompassing and quite broad. Equally, noble Lords have drawn attention to some consistent themes. I wish to put on record my thanks to the noble Lord, Lord Browne, for tabling this very important debate and for getting the insights from across your Lordships’ House. As the noble Baroness, Lady Bennett, pointed out, the attendance today demonstrates both the insights and experience on this important issue, even though we may have different perspectives on the issues that have been discussed.
I will address a couple of issues right from the outset. I agree with the noble Lord, Lord Hastings. It has been the greatest honour of my professional and political career to represent my country on the world stage. It is important that we reflect on who we are, what we are and what we stand for. It is also important to lead from the front and to look towards our own backyard and demonstrate that we stand up for the values that we all believe in. On this, the noble and right reverend Lord, Lord Harries, was spot on. As someone with a particular heritage who is proud of my faith, I value the fact that my country allows me to celebrate both. Equally, I am proud of my country, the United Kingdom, which allows me to do that.
But these values are not unique to the UK. As the noble and right reverend Lord, Lord Harries, pointed out, they are embedded in the common humanity that we all share. Equally, as we take the messages of strengthening democracy, we need to reflect on our own history, both recent and past, to ensure that, when we talk of human rights, we talk not by pointing a finger but through sharing experience, and when we talk about sharing and strengthening democracy and the rights of women, we do not say, “Look at us today”. We should reflect on our past and the hard struggle for democratic rights within our country.
Therefore, leadership is important and I assure the noble Lord, Lord Hastings, that in my engagements I put that very much at the heart of our diplomacy. As a country we believe in democracy. What we are seeing today is democracy very much in action—the ability for a government Minister to respond to challenges and criticisms. It is right that any thriving democracy allows that to happen. As my noble friend Lord Balfe said, it is important, whichever party we come from and whatever perspectives we bring, that we seek to defend them both individually and collectively.
We have seen, as the noble Baroness, Lady Bennett, said, human rights eroding. We should look to ensure that human rights, the rights of communities and people, are protected both internationally and at home. As the noble Lord, Lord Hannay, pointed out, many institutions took immense challenge to create, including the United Nations. It is not perfect in every way but, as a P5 member and a committed member of the multilateral system, we must do our best to change from within so that the institution itself is strengthened along with others.
From the economic strong-arming of China to the bullying tactics of Russia—the noble Lord, Lord Collins, pointed towards Ukraine, which is rightly taking up the bandwidth of many people in your Lordships’ House and beyond; we stand in solidarity with Ukraine against further Russian aggression—autocratic regimes are looking towards a democracy in terms of our strengthened, or indeed weakened, position. What happened in Afghanistan should not be lost on us. Countries will test us. I agree with the noble Lord, Lord Alton. He knows both from our public debates and from private discussions that the Chinese authorities are watching very carefully. They are looking at unity, not just of language but of purpose and action.
What has worked well recently? The Covid response was a matter of discussion for many months; indeed, more than two years. I say to the noble Lord, Lord Londesborough, that we saw the best focus and prioritisation of humanity and the interdependence of humanity, from academia to research to manufacture and delivery. I fully accept that there is so much more still to do, and we are focused on that. While it is far from a perfect outcome, one hopes that as we evolve as established democracies that were at the forefront of the vaccination, we do not forget smaller countries—developing nations that are yet to receive the vaccine in the way they require—and that we invest in their infrastructure, support and distribution. Now is the time for the free world to stand together.
As the noble Lord, Lord Anderson, pointed out, we have seen the decline of democracies around the world. As my noble friend Lord Balfe pointed out, democracy does not necessarily mean the election of Governments and Administrations who meet with our own aligned values.
Equally, when we look towards Russia, democracy also means that those in government protect those in opposition. It means that, after what we saw in the dreadful, awful and continuing case of Alexei Navalny, we stand together to show that democracy is not just about ensuring that your own position is secure—the Opposition are also free to challenge and be critical. That is why the UK is working with like-minded friends to build that network of liberty that my noble friend Lord Howell spoke of, and he knows very well the strength of that network, with its links to key institutions, including the institution of the Commonwealth, which brings together 54 nations. As my right honourable friend the Foreign Secretary has said, we will continue to build that network of liberty to promote democracy and freedom around the world.
The noble Lords, Lord Wallace and Lord Alton, talked about soft power, particularly of the BBC. I assure noble Lords of the fact that we continue to provide support to the BBC—this year, the budget is £94.4 million—and, as the noble Lord, Lord Collins, also pointed out, to the Westminster Foundation for Democracy. On the current settlement, although we are still going through the process at the FCDO, I agree with noble Lords that those institutions play an important role. The noble Lord, Lord Wallace, pointed to our universities, and I agree with him. He pointed to the cultural sector and the British Council, and I agree with him. All those institutions are an important part of what the United Kingdom does internationally. It means that together we build a powerful alternative for countries which, unhappily, do not share the strength of democracy.
We have heard about autocrats and populists; we must stand firm against that. That means building stronger security ties and a network of allies to protect our people, our friends and our freedoms and to show adversaries that they do not have a free hand to achieve their objectives through force. Therefore, it is important that we continue to build alliances, as we have done recently through the AUKUS partnership with the US and Australia, which will help to protect sea routes and stability across the Indo-Pacific, while deepening our work with Canada to cover the Arctic and beyond.
It is key that, in building these alliances, we continue to stand up for free market economics and argue for trade and technology as tools of liberation, not control. It means offering a compelling alternative to low-income countries whose balance sheets are loaded, as several noble Lords pointed out, with debt to China. As the noble Baroness, Lady Bennett, and the noble Lord, Lord Griffiths, pointed out, inequality is real and in front of us. In the alternative that we present, empowerment through the economy and economic empowerment must be based on equality and not on debt reliance. That means cutting our strategic dependence on authoritarian regimes, starting with Europe’s unsustainable reliance on Russian energy. We have seen that Russia can and will weaponise that, and the United Kingdom is responding to all these challenges.
We are building new and improved trading ties with like-minded nations, with two-thirds of our trade now covered by trade deals. We will continue to explore new areas of work. Many noble Lords focused on the issue of illicit finance and money laundering, and I am conscious that there were many detailed questions, but I shall seek to provide a framework to many of the questions that were asked. I pay particular tribute to the noble Lord, Lord Hain, for drawing attention to particular issues that have arisen, and I know that my right honourable friend the Chancellor of the Duchy of Lancaster has written to him on the specific issues that he raised. I hope that he would acknowledge that, on the issues that he raised and the follow-ups—I was conscious of a letter pending—we will follow up and take action, as we have done when exercising sanctions.
The noble Lord, Lord Browne, talked of the year of action, as did the noble Lord, Lord Collins, and others. It is right, and the UK has recognised that, as home to one of the world’s leading financial centres, it is a problem—but we need to face up to the challenge and work in partnership with others who face similar challenges. The corrosive risk of dirty money, including from Russia, being laundered in the UK poses a serious and dangerous risk to our national security, and we have consistently reinforced our ability to crack down on illicit finance in the UK through legislation and the strength of law enforcement response. Money obtained through criminality or corruption is not welcome in the UK, and more needs to be done. In 2018, the Financial Action Task Force found that the UK had one of the strongest systems for combating money laundering and terrorist financing of more than 60 countries that it assessed. We will also ensure the full weight of law enforcement will crack down on those who look to use, move or hide their proceeds of crime.
The noble Baroness, Lady Kramer, and the noble Lords, Lord Browne, Lord Purvis, and others, raised the important issue of money laundered within the City of London. I acknowledge that the UK has one of the world’s largest and most open economies. I was in the City of London for over 20 years: you see the international finance infrastructure and yes, it is the world’s most attractive destination for overseas investors, including Russia. These factors include a range of viable corporate structures, making the UK attractive for legitimate business. However, I recognise, as noble Lords have pointed out, that that also exposes the UK to money-laundering risks, including those relating to Russia. We are well aware of individuals with links to the Russian state who may seek to further damage the reputation and influence within the UK, but also to use their own influence through strategic investments. We will continue to look at those cases in closer detail to ensure that we can act accordingly.
The noble Baroness, Lady Kramer, referred to Transparency International. I am sure she is also aware of a recent report that gives the UK a score of 78 out of 100 in Transparency International’s 2021 corruption perceptions index. I believe we were just outside the top 10, with Germany ahead of us. However, that does not mean that we rest on our laurels; there is more to be done. We will take robust action to crack down on dirty money. For example, we have broadened our sanctions regime through the global anti-corruption sanctions regime, and we are delivering on the UK Economic Crime Plan and the United Kingdom Anti-corruption Strategy. I note of course the concerns noble Lords have expressed about the economic crime Bill, and I assure them that we are following that up directly with our colleagues in the Treasury.
I say to the noble Baroness and the noble Lords, Lord Purvis, Lord Collins and Lord Browne, that the Financial Action Task Force is an important institution that feels that we have one of the strongest systems in the world. However, we will continue to work to ensure that we take further action. The noble Lord, Lord Collins, mentioned specific questions he has asked me. I have literally just signed a letter to him, so on receipt of that, I am sure we will have further exchanges.
The issue of Russian influence on elections in the UK is of great concern. The Government themselves concluded that
“it is almost certain that Russian actors sought to interfere in the 2019 General Election through the online amplification of illicitly acquired and leaked Government documents.”—[Official Report, Commons, 16/7/20; col. 384WS.]
I will not comment any further at this point, as a criminal investigation is ongoing.
The noble Baroness, Lady Kramer, talked about the overseas territories and the legislation which has been passed. We are working closely with the OTs and indeed the Crown dependencies on the issue of public registers, and they have all committed to public registers of ownership by 2023.
The noble Baronesses, Lady Bennett and Lady Kramer, mentioned tier 1 visas. I have noted the detail of the specific questions asked. The noble Lord, Lord Collins, pointed to the response my right honourable friend the Foreign Secretary gave. The Foreign Secretary and the Home Secretary are both seized of the important issues relating to the use of tier 1 visas, particularly those granted before the date of renewal, which was 5 April, and the use of such visas by those who seek to bring further disrepute to the United Kingdom. I will follow that up and will update the noble Baronesses accordingly.
Various countries were mentioned during what has been an intense debate about the actions taken. The noble Lord, Lord Foulkes, talked about Belarus. I pay tribute to his work and to that of others in your Lordships’ House in the Council of Europe. I met with the leader of the PACE delegation, and I am now the Minister looking after the Council of Europe; I look forward to engaging. Noble Lords referred to the importance of discussion and debate in the Council of Europe, particularly when the likes of Turkey and Russia are present. Certainly, from my own experience—others may challenge me—even with the worst foe or those you may feel most challenged by, you should never give up on the importance of discussion. I assure your Lordships that no one is taking aim at me. Nevertheless, this is an important point to consider, and I look forward to working with the delegation. I pay tribute to the noble Lord, Lord Foulkes, in particular, for adopting a prisoner. He has taken a very noble decision and perhaps others should reflect on that action. I am inclined to learn more about that initiative.
The noble Lord, Lord Alton, talked about Taiwan. The Government’s position has not changed, but as I have already acknowledged, the concerning situation and the ever-assertiveness of the Chinese Administration in the Taiwan Strait is a cause of great concern. This matter was very much discussed at the G7, and it continues to be an area of focus.
The noble Lord, Lord Griffiths, talked about Haiti. One thing I will share with noble Lords is that there was a crisis in Haiti in the midst of the Afghanistan crisis, and I was proud of the fact that, notwithstanding the challenge and the scrutiny of our response to Afghanistan, the Foreign, Commonwealth and Development Office also stood firm in its support of Haiti at a time of great challenge. This comes back to that central issue of values and action. Notwithstanding criticisms and challenge, we stand by those countries that need us—but, equally, this should be a co-ordinated, sustainable and long-term response.
My noble friend Lord Hannan and others talked about the situation in Tunisia. We saw Tunisia as one of the countries that came through the Arab spring positively, and it is important that we watch very carefully what happens there. My noble friend also talked of Pakistan, and there is a read-across to China. As we seek to strengthen, build and invest in relationships, particularly our people-to-people links, we also see the influence of other players, particularly China, in Pakistan—as he will have seen through my own direct engagement with the Prime Minister, the Foreign Minister and the Human Rights Minister. One challenging question from my side to theirs was: what about condemning the treatment of Uighurs? The response was deafening silence, so there is work to be done as we counter this.
The noble Lord, Lord Purvis, talked about Kazakhstan, as did the noble Viscount, Lord Waverley. As the Minister now responsible for central Asia, I am watching it very carefully. There is one positive we can take in terms of the support given by Russia and Belarus, as we have seen the structural withdrawal of those troops from Kazakhstan’s territory.
Other areas are part and parcel of our work on the world stage. I could talk about the work that we do through cyber and digital, which my noble friend Lord Howell pointed to, which brings both opportunities and challenges. The noble and right reverend Lord, Lord Harries, pointed out the equal dignity of human beings. That should be the central aim of how we stand strong when it comes to human rights, whatever we stand for.
My noble friend Lord Hannan also talked about the importance of law and rules rather than the people who become the rulers themselves. Through our independent sanctions regime we are targeting those responsible for corruption and human rights violations around the world—in Myanmar, Belarus, China, Pakistan and Venezuela, to name a few. We also continue to lead on the Human Rights Council and the UN, which remain important parts of our focus.
On women and girls, as Nelson Mandela said:
“An educated, enlightened and informed population is one of the surest ways of promoting the health of a democracy.”
However, that can be put forward with strength only when we tackle gender inequality. That is a core part of the Government’s mission and right at the centre of the Foreign Secretary’s priorities.
During our G7 presidency, we rallied a new commitment to democracy. At the Cornwall summit, leaders pledged to harness the power of democracy. Yes, I assure noble Lords that whether it is in sub-Saharan Africa, on which my noble friend Lord Eccles focused, or with the multilateral initiatives we take—which were a mainstay of the contribution made by the noble Lord, Lord Hannay—we will continue to work and strengthen our work, including the Summit for Democracy, which was held in support of these aims and objectives.
To say a final word on the Council of Europe, that remains central to our thinking. I look forward to working with noble Lords quite directly to see how we can link in the work of what the Government are seeking to do with the important work of the Council of Europe, particularly on human rights.
To conclude, this has been an enriching debate. Again, I am grateful to the noble Lord, Lord Browne, for the specifics that he drew attention to. There is an action plan on various areas of work, including tackling illicit finance and money laundering, but also standing up and strengthening democracies globally—as I said, not in a lecturing way, but in a way where we can share our rich and diverse experience for the health of democracies around the world.
I was asked questions about leadership and how we often look towards ourselves and our motivations. I am proud of the fact that our country is what it is—one that provides equality of opportunity. I am also reminded, as the noble Lord, Lord Hannay, reminded us all, that we must create a world in which democracy cannot just exist but flourish and thrive.
I end on the words of one of my personal heroes, Mahatma Gandhi, who said the following:
“Keep your thoughts positive because your thoughts become your words. Keep your words positive because your words become your behaviour. Keep your behaviour positive because your behaviour becomes your habits. Keep your habits positive because your habits become your values. Keep your values positive because your values become your destiny.”
My Lords, we have had an excellent debate and I thank the noble Lord, Lord Ahmad, for characteristically, carefully, generously and respectfully responding to the debate. I thank all noble Lords for their valuable contributions. We have had a wide-ranging and informed debate—informed by significant awareness and self-awareness. I shall come back to that point.
I do not intend to respond individually to any or all contributions and would not be able to do that in the time left to me, in any event—I would not have the ability to respond to quality of the contributions and the points made. All that I can say is that every speech was an adornment to the debate, and I am extremely grateful for them.
I want to make just two points; it is really one point with two halves. I should make it clear that I come away from this debate conscious that we all have a shared responsibility for the defence of democracy. I say specifically to the noble Baroness, Lady Bennett, that we all have a shared responsibility for the history that has got us into this difficulty in the first place. I think that we all recognise that. There is a great deal of self-awareness, and that was obvious in this debate.
The phrase, “to see ourselves as others see us” has been used. That is interesting, because we are nine days away from 25 January, the day on which the people of Scotland celebrate the birth of Robert Burns, the poet. My noble friend Lord Foulkes of Cumnock had the pleasure and honour to represent a part of Ayrshire where every word that anyone remembers that Robert Burns wrote was written. When my noble friend retired, the boundaries were rearranged and I inherited the very town where those words were written, Mauchline in Ayrshire. I represented it for a period, and Burns was a significant part of certainly my late winter life as a Member of Parliament. I have been to more Burns suppers than I ever want to go to again, I have to say!
For those noble Lords who do not know where that phrase comes from, it is from a poem that contains a moral lesson for mankind. The poem was, characteristically for Burns, written about a scene that he observed in a kirk, in the congregation of a church—a church that still exists. There was a preening young woman in that church because she was attracting gazes from everybody. The fact of the matter was that the other members of the congregation were not looking at her but at the insect on her bonnet. Burns wrote this moral lesson with the words that you should pray for the gift,
“To see oursels as others see us!
It wad frae monie a blunder free us”.
I am not going to take that any further because the name of the poem is, “To a Louse”. Given the context in which that was made, I would perhaps be being a bit too party political. We should remember that poem.
In the seconds left to me, I will do what I should have done when I first spoke. I apologise for not doing so. I beg to move.
Committee adjourned at 5.30 pm.