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Lords Chamber

Volume 824: debated on Wednesday 19 October 2022

House of Lords

Wednesday 19 October 2022

Prayers—read by the Lord Bishop of Oxford.

Oaths and Affirmations

Several noble Lords took the oath or made the solemn affirmation.

Rwanda Asylum Partnership


Asked by

To ask His Majesty’s Government whether it is still their policy to send asylum seekers to Rwanda.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I think I am right in saying that this is the Minister’s first appearance in this post, so I welcome him and warn him of trouble to come.

My Lords, the Government remain committed to delivering the partnership between the UK and Rwanda, so we can break the business model of people smugglers and prevent further loss of life in the channel. Working together, the UK and Rwanda will help to make the immigration system fairer and ensure that people are safe and enjoy new opportunities to flourish.

My Lords, that is of course the standard Answer. I had hoped for a little bit of a U-turn on this issue, but it seems there will not be one. The Government say that this is fully in accordance with the United Nations High Commissioner for Refugees, but the UNHCR disputes this. There is no basis in international law for our doing this, and we are made to look foolish and in breach of our normal traditions of human rights and a humanitarian approach to refugees. Is it not time for the Government to think again? This is not going to happen in any case, because the lawyers are going to stop it.

I remind noble Lords that Rwanda is a state party to the 1951 UN refugee convention and the seven core UN human rights conventions. It is also worth pointing out that, in September 2019, the African Union, the Government of Rwanda and the UNHCR signed a memorandum of understanding to set up an emergency transit mechanism to evacuate refugees and asylum seekers out of Libya. The EU has provided support and donated €12.5 million to the ETM through its emergency trust fund. The UNHCR also stated, in a 2020 press notice, that

“Rwanda has been welcoming refugees for over two decades … The country offers a safe and protective environment to all asylum seekers and refugees.”

There seems to be a degree of inconsistency in the UNHCR’s opinion.

My Lords, I have just returned from a parliamentary visit to Rwanda. Could the Minister clarify which authority in Rwanda would be responsible for determining refugee asylum status? What guarantees are there that the 1951 convention criteria will be faithfully followed? I say this simply because, during this visit, President Kagame said that he was looking for new skills and talents among the refugees or asylum seekers who might be arriving in Rwanda.

As the noble Baroness is aware, the foundation for this is a memorandum of understanding that, it is strongly believed, covers the various points that she made. I cannot answer precisely who is responsible at the Rwandan end, but there are teams of Home Office personnel in place who will also monitor progress.

My Lords, most of the Rwanda Cabinet were refugees and understand the difficulties that people face, particularly coming from war-torn countries. Rwanda has moved forward massively from the days when it suffered war and genocide. Does my noble friend agree that we need to kickstart this process for illegal immigrants as soon as possible as we cannot sustain the levels as they stand and be seen to support people traffickers, who continue to make money on the backs of human misery?

I thank my noble friend for that question and I agree with her. The point of this policy is to break the vile criminal enterprise that operates in the channel. I think most noble Lords would approve of that aim. As to whether Rwanda is safe, which is the essence of my noble friend’s question, I say that it is a fundamentally safe and secure country with respect for the rule of law. She is right to point out that the majority of the Cabinet were refugees, and it is also worth pointing out that Rwanda has one of only two, I think, Parliaments in the world that has a majority of women sitting in it.

My Lords, the UK’s population, about 67 million, is five times that of Rwanda at about 13 million. Yet Rwanda, which is a country far poorer than us, as has already been pointed out, hosts one refugee for every 90 people whereas the figure here is one refugee for every 500 people. I do not think I can put my hand on my heart and say that the UK is doing its bit in a global crisis. I wonder whether the Minister would like to say what we are going to do to play our part in taking refugees here.

The most reverend Primate refers to refugees, so I will too. It is fairly self-evident what we have been doing for refugees, including BNO passport holders from Hong Kong—over 130,000 such visas have now been issued—Ukrainian refugees and Afghan refugees. I remind noble Lords that at the moment the taxpayer is spending about £2 billion a year on this problem. This is about asylum seekers arriving from safe countries, and about trying to put the criminal gangs out of business.

I am grateful to the Government Chief Whip. I visited the reception centre in Kigali in June, and I asked about the legal basis of that centre, which is on a private contract on an annual basis that will run out in April. I saw no facilities for people who will be vulnerable or at suicide risk, and I have asked repeatedly in this House about the legal underpinning of the MoU. This House’s International Agreements Committee has today reported to say that it is unacceptable for measures such as this to be under an MoU rather than being under a treaty. Will the Government think again and allow Parliament to vote on, scrutinise and ratify this agreement if they believe that it is sound?

I thank the noble Lord for his two questions. First, he mentioned the risk of suicide. It is worth pointing out that the health and welfare of those in immigration detention is of the utmost importance. We have a dedicated welfare team on site at each immigration removal centre which is responsible for identifying vulnerable individuals and providing assistance to support an individual’s needs. I remind noble Lords that decisions will be taken on a case-by-case basis and nobody will be relocated if it is unsafe or inappropriate for them. With regard to the terms governing this, which was his second question, he will not be surprised to hear me answer that this is slightly above my pay grade, but I will happily take it back to the department.

My Lords, in a Written Answer on 13 October, a Home Office Minister revealed that, as well as the £120 million down payment on this policy, there was

“a £20m upfront payment to the Government of Rwanda to support initial set up costs.”

Is the Minister able to give clarity to the House on the full cost per person of this scheme and to say whether there will be further up-front payments?

I am afraid I am not able to comment on the cost per person; as of yet no one has actually gone, as noble Lords know, so it would be premature to do so. As the noble Lord points out, the UK has invested an initial £120 million into the economic development and growth of Rwanda, and £20 million has been committed to the centre described in the last question. It is an up-front payment to the Government of Rwanda to support initial set-up costs. As and when those other figures are available, I will come back to him.

My Lords, my noble friend the Minister knows that I am among a number on these Benches who are deeply uncomfortable with this policy and with some of the language used, even by those at the top of the Home Office, in discussing it. Surely the hundreds of millions of pounds already spent and earmarked for implementing this policy in future would be better spent here, speeding up the systems and processes at the Home Office so that decisions are made fairly and in good time and those in genuine need receive the security they deserve, while those with no grounds to remain are returned to their countries of origin and not a land they have no link to. I ask him to take this suggestion back to the department.

I understand the strength of feeling, so of course I will be more than happy to take my noble friend’s suggestion back to the department.

My Lords, the Minister said that this was above his pay grade. Not only, as the noble Lord, Lord Purvis, said, does the report that my committee produced yesterday say that it is “unacceptable” that this should be by an MoU rather than a treaty—which means it does not come through this or the other House—but the Home Office declined the invitation to give evidence to us on its reason for avoiding parliamentary scrutiny by using an MoU. There is no excuse for that, and we deserve a reason why the Home Office has back-tracked and used not a treaty, as it should have, but an MoU.

As I answered to the noble Lord, Lord Purvis, I will absolutely take that back to the Home Office and see what can be done.

My Lords, the United Nations High Commissioner for Refugees, in a written submission to the High Court this year—not a previous year—said:

“There should be no transfers of asylum seekers from the UK to Rwanda under the UK-Rwanda Arrangement.”

It said there was “a serious risk” of human rights abuses and a serial disregard for international law in Rwanda. The UNHCR has clearly changed its mind. Why will the Government not change theirs?

My Lords, I have already stated that we are of the firm opinion that Rwanda complies with international law. I go back to my earlier answer: under the scheme I described earlier, the emergency transit mechanism under the aegis of the UNHCR, Rwanda has welcomed and integrated more than 500 individuals who were evacuated from Libya. Personally, I am at a bit of a loss to understand why the UNHCR seems to take this line with us when it is doing it itself.

Older Persons Commissioner for England


Asked by

To ask His Majesty’s Government what consideration they have given to the appointment of an Older Persons Commissioner for England.

My Lords, I fear I will disappoint the noble Lord, Lord Foulkes, because I must confirm that the Government have no plans to appoint an older people’s commissioner in England. The Government’s business champion for older workers, Andy Briggs, engages with business to promote the benefits of employing and retaining older workers in England. The Government are delivering a new enhanced support package for workers over the age of 50 to help them to stay in and return to work.

The Minister is right; I am really disappointed. I heard Heléna Herklots, the Welsh commissioner, speak to the National Pensioners Convention about how she seeks out ageism, tackles it and ensures that it is no longer continuing in Wales. Will the Minister at least meet a deputation consisting of representatives from this House and the other House, and the organisations concerned, so that we can persuade her that what is good enough for Wales—and indeed Northern Ireland—is also appropriate for Scotland and England?

As I hope I have proved to the noble Lord on many occasions, I am very happy to meet him and others to discuss this.

My Lords, can my noble friend tell me what opportunities there are for older people to receive education and training from her department? In that connection, may I point out that there are many vacancies in the horticultural industry for people whose great skills are required, and with good pay, contrary to popular belief?

I am very pleased to say to my noble friend that we are investing £1.34 billion in education and skills training for adults through the adult education budget. We have the flexible support fund, which we can use on a flexible basis, and have launched a £2.4 billion national skills fund. On my noble friend’s point about the horticultural industry, there is a wide range of vacancies, all paying well. We think that people with mental health problems really benefit from being in that sector: I will cite one example. The lady Mayor of Merton has purloined half of a large allotment facility in Mitcham. She is a Labour mayor; her name is Joan and I think she is cracking. My sister, who has real difficulties, has one of the mayor’s allotments and it has turned her life around. She now has five customers whose gardens she does, so we are right behind this type of thinking.

My Lords, it is a rare occasion when you will find me agreeing with the noble Lord, Lord Foulkes, but on this occasion I would ask the Government to think again. We will all remember the horrific cases during the pandemic, when blanket DNACPRs were put out across care homes. I cannot help but think that had there been an older person’s commissioner in place, some of these cases would not have happened. We have also had the cases at Edenfield and across other care homes. Will the Minister please take this away again and reconsider cross-party working and representation for older people?

I think the noble Lord, Lord Foulkes, has a recruit to his group. I hope that my noble friend will take up that opportunity. I am sure that, given the benefits of such a position as she described, it will be for her to build up the case and put that forward.

Is the Minister aware that the commissioner for older people in Wales was first appointed in 2008, as the first such commissioner in the world? If the Minister looks on the website of Heléna Herklots, our commissioner for older people, she will see the valuable work that is done. The commissioner is a direct voice for older people to the Welsh Labour Government. I will read out her aims:

“I’m taking action to protect older people’s rights, end ageism and age discrimination, stop the abuse of older people and enable everyone to age well.”

Older people in Wales have this commissioner, so will the Minister consider again getting a commissioner for older people in England?

I know that noble Lords like to get me into trouble but the fact of the matter is that the Government’s position, as it stands, is that there is no plan to introduce a commissioner. I have read the brief of the Welsh commissioner and tried to familiarise myself with her role. I suggest the noble Baroness joins the campaign of her noble friend Lord Foulkes. I will meet and I will listen.

My Lords, does the Minister agree that many of the issues facing older people, such as lack of affordable care, poor housing, pensioner poverty and isolation, require a cross-cutting approach if they are to be resolved? Would she agree that a strong independent voice for older people is needed at the highest level? If they do not appoint a commissioner, what will the Government do to make cross-departmental working a priority, end the marginalisation of older people and champion their needs?

The noble Baroness has put forward reasons for having somebody to represent older people and I hear that. I am sure that by the time officials in my department have read Hansard they will have got the message, so please join the meeting. On the second part of the noble Baroness’s question, I am not able to commit to or confirm her request.

Would my noble friend agree that, if such a commissioner were appointed, he or she would have plenty of work in your Lordships’ House?

My Lords, I think the Minister has probably got the idea now that an old persons’ commissioner might be popular. I would have thought that the Government might be looking for popular things at the moment. Will the noble Baroness meet representatives of the WASPI women—the 3.6 million women whose pension age unexpectedly rose? I would also like the Minister to take this opportunity to clarify for the House whether the triple lock is to be kept or abandoned.

On the request to meet the WASPI ladies, the noble Baroness will understand that I will need to go back and talk to our new Minister for Pensions. I will put that request in and come back to the noble Baroness; I will write and put a copy in the Library. In 2019, the Government were elected and committed to the triple lock. As our Prime Minister has confirmed today, we will honour that triple lock for 2023-24 and the remainder of the Parliament.

My Lords, could I make a gentle suggestion and say to my noble friend that I am very glad she is thinking of this again? There would be nobody more suited for this job—because he could do both Scotland and England—than the noble Lord, Lord Foulkes.

Is the Minister concerned about the way many older people these days are being forced to open a bank account, following the ending of the Post Office card? It is so difficult for someone living on only a very small pension. Would she look into this? It might be something an older persons’ commissioner would do if we had one.

I thank the noble Baroness for her question. I am going to be absolutely straight; my knowledge about the change to bank accounts and the Post Office card is not as sharp as it should be. I thought we had put different things in place so that people did not suffer as a result. I will go back to the department, find out the exact position, come back to the noble Baroness in writing and place a copy in the Library.

My Lords, is there a Minister for older people? If so, what does the Minister do, and if not, should there not be one?

I am not aware of there being a Minister for older people—unless anybody else can help me out here. As for whether there should be one, I suppose at some appropriate point we might recommend that to the Prime Minister.

Does my noble friend not think that there are enough commissioners and quangos, at enormous expense to the taxpayer, already? Do we really need another one?

There are a number and there is a cost associated with them. What we should do is look at the outcomes of their work to assess their value for money and the difference they make. I do not think I can say any more than that.

Workforce: Trades Union Congress


Asked by

To ask His Majesty’s Government when the Prime Minister expects to meet representatives of the Trades Union Congress to discuss problems facing the workforce in the United Kingdom; and what measures they intend to take to alleviate those problems.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and draw attention to my entry in the register as president of a TUC-affiliated union.

My Lords, the Department for Business, Energy and Industrial Strategy is responsible for labour relations and works closely with trade unions. Positive engagement is essential to developing and delivering our policies, and during the pandemic it helped to support jobs and keep workers safe. That engagement is ongoing and remains largely positive.

I do not think I can thank the Minister for that Answer because the Question was about when the Prime Minister was going to meet representatives of the trade union movement. I have come back from the Trades Union Congress at the beginning of this week, where there was dismay that a Government who are looking to build back better and make use of the resources of the British labour force are apparently treating the trade unions with something that approaches disdain and proposing to bring forward legislation that will do nothing whatever to improve industrial relations. So I ask the Minister to answer the Question: does he know when the Prime Minister will meet the TUC, and, if not, will he get on to Downing Street and advise them that they should?

I am sure that the Prime Minister does not need my advice as to whether she wishes to meet the Trades Union Congress. The direct answer to my noble friend’s Question is that I have no information that a meeting is scheduled or not.

My Lords, Frances O’Grady, the TUC general secretary, will be a welcome addition to your Lordships’ House. Last year, when talking about supply chains and employment, she said:

“Ministers may scratch their heads about how to protect supply chains and fill vacancies. Well, here’s a novel idea. Invite unions in with employers. Get us around the table. And let’s make that industry deliver decent conditions, direct employment and a proper pay rise.”

Does the Minister share my view that this is an eminently sensible suggestion, and will he action it?

We are always looking for helpful suggestions to improve supply chains. In fact, Frances O’Grady was in a BEIS meeting with one of my ministerial colleagues in August. We remain open to constructive meetings with trade unions where it is required.

The noble Lord talked about opportunities for the supply chain. The biggest barrier to growth and prosperity in this country is a shortage of skills, so will the Minister take back the comment that the Government, trade unions and employers must work together to deliver the skills we need? Can the Minister tell us what new initiatives the Government are now bringing in place to deliver the skills that we so badly need?

Skills is an important part of the Government’s agenda; we are spending some £2.5 billion, directed through the Department for Education, on building up skills provision across the economy. We remain open to working with trade unions, employers and whoever has good proposals for the future.

My Lords, this is not just a question of being “open” to working with trade unions; it is a question of whether the representatives of 30 million workers in this country should have a seat at the table to discuss with employers and with government the answers to many of our problems—which cannot be in doubt. Will the Minister reconsider setting up something formal between the TUC, the CBI, representatives of small business and government to look at the problems this country is facing?

I said that we remain open to meeting trade unions. However, the noble Lord’s figures are wrong: trade unions do not represent 30 million workers in this country; only 23% of workers are members of trade unions, so more than three-quarters are not represented by them.

My Lords, is the Minister aware that one of the problems facing workers is ageism? This could be properly dealt with if we had an older people’s commissioner.

I followed the previous exchanges with interest and fully endorse the noble Lord’s job application.

My Lords, the Minister made comments about the number of trade unionists. Many members of staff in the health service are members of trade unions. We have a situation where there is no funded workforce plan for the NHS, and we are importing doctors and nurses from many developing countries to make up in the shortfalls in this country. Is that not a priority for the Government to talk to trade unions about?

I am sure that my health department colleagues engage regularly with the trade unions. As the noble Lord says, the membership of trade unions is higher in many public services. I am sure that these contacts are ongoing.

Metropolitan Police: Misconduct


Asked by

To ask His Majesty’s Government what assessment they have made of the interim report by Baroness Casey of Blackstock on misconduct in the Metropolitan Police, published on 17 October.

My Lords, interim findings of the review done by the noble Baroness, Lady Casey, set out worrying failures of the Metropolitan Police Service to operate effectively within the misconduct framework and to tackle instances of sexual misconduct and discrimination. I welcome the commissioner’s response, ensuring that action to deliver change must, first and foremost, come from within the Met. The Government have announced an internal review into the effectiveness of the police dismissals process to ensure high standards across policing.

My Lords, does not this report make the most painful reading? It is painful for the Government, who have done little to bear down on police misconduct; painful for fine and trustworthy police officers, who have discharged their duty without fault over many years; and painful above all for those who have served as Metropolitan Police Commissioners. They surely have let down their fine, trustworthy colleagues, by turning a blind eye to the spread of crime and misconduct in the Metropolitan Police. Surely, there can be no doubt that the shocking features of Met activity set out in this report go back years. Will we hear explanations and apologies from those who have served as Metropolitan Police Commissioners in recent years?

Finally, can I seek some information from the Government? How many Metropolitan Police officers are at present under suspension? How many are on long-term sick leave? How many have resigned from the force within the last year while under investigation?

The noble Lord asks a number of questions and invites a number of responses. I shall confine myself to the data that he asked for at the end—and I am grateful to him for giving me advance notice of the data so that I could get the right answers for him.

The Home Office collects and publishes data annually on police officers on long-term absence, classed as those lasting at least 28 calendar days, by type of absence, including suspension and sick leave. This data shows that, as of 31 March 2022, the Metropolitan Police Service had 449 officers full-time equivalent on long-term sick leave and seven officers were suspended. The Home Office does not collect data on the number of officers who resign while under investigation, but I remind the noble Lord that, since December 2017, resignation does not preclude the force from pursuing misconduct proceedings against an officer. In 2021-22, the College of Policing’s barred list statistics show that 14 officers who had resigned and four who had retired would have been dismissed from the Metropolitan Police had they still been serving. These individuals are still placed on the barred list and still prevented from rejoining front-line policing.

I apologise for the long answer, but I felt that it was appropriate.

My Lords, I pay tribute to the noble Lord, Lord Lexden, for his fearless efforts on this front over many years. Surely, we are all grateful to the noble Baroness, Lady Casey, for an interim report that appears to contradict the former Met Commissioner’s “few rotten apples” theory about the Metropolitan Police. Might the Minister reflect that, in the light of this interim report, now is not the time to hand even more draconian powers to an unreformed police service. The Government might be wise to swap legislation for the reform of police discipline for the Public Order Bill currently heading our way.

I am afraid that I am going to disappoint the noble Baroness and not agree with her, but I am going to say that I think that the Metropolitan Police Service’s response to the interim report is most welcome. The new commissioner, Sir Mark Rowley, has the full support of the Home Secretary in delivering his plan for transforming the Met, focusing on the key areas of more trust, higher standards and less crime. I hope that all noble Lords will welcome his initial responses, which have been broadly welcomed across the spectrum.

My Lords, Sir Mark Rowley has set out a bold plan to turn things around but, without very swift changes to police misconduct regulations and strong support from the Home Secretary, he will not achieve his objectives. Will he get them? Another review is just not good enough.

Again, I am afraid that I do entirely agree. It is also worth pointing out that the noble Lord omitted to mention the split of responsibility between the Home Office, the Mayor of London and the London Assembly. The Mayor of London is the occupant of the Mayor’s Office for Policing and Crime—MOPAC—which is the equivalent of a PCC for London. It is responsible for holding the Commissioner of the Met to account for the exercise of their functions and the function of those under their direction and control. MOPAC is also responsible for ensuring that the Metropolitan Police is efficient and effective in setting policing and crime objectives. There are a number of players in this particular space at the moment; they all have a job to do and, as I say, I welcome—and I think everybody should welcome— Sir Mark Rowley’s initial response.

My Lords, my noble friend has just rightly said that action should be taken. I think we all agree that those who transgress the high standards in public office should be dealt with and that lessons should be learned. However, is it not also right for us to acknowledge that the vast majority of serving police officers, men and women, serve this country with the highest levels of probity and public service, for which we should be enormously grateful?

I could not agree more with my noble friend and I am grateful for the opportunity to pay tribute to the vast majority of our police men and women in the Met and indeed across the whole country. They do a very difficult and often thankless job in often very difficult conditions, and they do it to a very high standard. I thank my noble friend for the opportunity to say that, and I thank those officers. I am sure that they are equally upset by this report’s findings.

My Lords, it may well be that the problems identified in the Casey report go beyond the Metropolitan Police. On this side of the House, we believe that the Home Secretary needs to personally take action. Will she now require all police forces to produce data and analysis of their misconduct systems in the same level of detail as in the Casey report, so that we can know what is happening in every police force in England and Wales?

The noble Lord makes some sensible suggestions and I refer back to the review that I referenced in my Answer to the original Question. I will quote the Statement made by the Minister of State for Crime, Policing and Fire:

“The Government will work closely with key policing stakeholders to examine evidence of the effectiveness of the system to remove those who are not fit to serve the public. As well as examining the overall effectiveness of dismissal arrangements”,

he expects the review to consider

“the impact of the introduction of Legally Qualified Chairs to decide misconduct cases; whether decisions made by Misconduct Panels are consistent across all 43 forces in England and Wales; and whether forces are making effective use of their powers to dismiss officers on probation. This focused review will be launched shortly and will be conducted swiftly.”—[Official Report, Commons, 18/10/22; col. 22WS.]

My Lords, the House will recognise that the noble Baroness, Lady Casey, has done an excellent job in producing such a challenging and far-seeing report. But does the Minister agree that that is only the first stage? The really big test is whether the report will be implemented—and implemented thoroughly. I have not spoken to the noble Baroness, Lady Casey, before I say this, but would the Minister be willing to consider ensuring that she remains involved to ensure that her recommendations are carried through?

Obviously, I cannot commit to that, but I think the noble Lord makes some very sensible points. As I have said already in answering this Question, I am very encouraged by Sir Mark Rowley’s determined statement. Obviously, delivery is slightly different from making a statement, but he has certainly set out on the right road.

My Lords, I think we have a bit of time, so let us hear from my noble friend Lord Hailsham, followed by the noble Lord.

My Lords, may I put to my noble friend a model that Parliament has established for other professions, such as doctors and nurses? He will know that when a complaint is made to one of those authorities, it can be very rapidly transmitted to an independent interim appeals body, which can make an interim order of conditions or suspension pending a proper investigation of the complaint. Is that not a model that we should consider? Although I recognise that there would have to be an independent authority to which the initial complaint is made.

My Lords, I refer to my interests in the register in respect of policing. We are grateful, of course, to the Minister for explaining the complicated arrangements for the governance of policing in London, but could we be clear? He said that the Minister said that the commissioner will have the support of the Home Office. Will that extend to looking at how legally qualified chairs of panels have overturned disciplinary decisions? And, when the going gets extremely tough, will the Home Office support the commissioner? It was the previous commissioner who brought in the noble Baroness, Lady Casey, to do this excellent report; will the Home Office now support the new commissioner in making sure that this is implemented—even when it becomes controversial, as it will?

The noble Lord asked me two questions. I refer back to my previous answer on police dismissals. The review will investigate the impact of the introduction of legally qualified chairs. I believe the policy is about seven years old now and it deserves to be looked at, for obvious reasons. As for Home Office support, I think I have been very clear: Sir Mark Rowley enjoys the trust and confidence of the Home Office and the Secretary of State.

Hereditary Peers By-election


The Clerk of the Parliaments announced the result of the by-election to elect two hereditary Peers, in place of Lord Colwyn and Viscount Ullswater.

One hundred and ninety Lords submitted valid ballots. A notice detailing the results is available in the Printed Paper Office and online. The successful candidates were Lord Roborough and the Earl of Minto.

My Lords, I cannot resist making a couple of brief comments. I know I have been doing this for some time; it would be very nice if I could pass on the responsibility for doing it to my eldest son.

Just to put it in context, because this really is a pretty astonishing period, we have five by-elections in the space of three days. I do not think there has ever been anything quite like it. Of course, I congratulate the two winners, but to the 20 losers—there were 22 candidates—I say, “Do not despair, because there is another one coming along on Friday.” Two Tories were elected today, one Cross-Bencher will be elected tomorrow and two more Tories on Friday, so out of 22 candidates I make that a one in five chance of being in this House by Friday if you are a Tory hereditary Peer. It is a pretty small market. The normal ratio of winners to electorate for by-elections to the other House is 1:73,000. I also ought to point out that they are coming with increasing frequency, as I mentioned in the House a little while ago.

They are getting older, as my noble friend says. We have had 16 by-elections in the 16 months—by coincidence, it is 16 months—since by-elections resumed after the suspension during the period of Covid, so we have had 16 new Members: two Labour; two Cross Bench; and 12 Conservatives. Nine of the 12 Conservatives were elected by this privileged circle of Conservative hereditary Peers, so nine selected by 43: again, the stats are pretty good if you are a hereditary and a Conservative. I can mark a landmark, which some may celebrate but I have to admit that I do not, that with the two elected today, there have now been 50 Peers elected via the by-election system since it began in 1999.

It is interesting that, as we all know, this was introduced as a temporary measure—we have had 50—and now the next generation is moving on. Peers who came in at a by-election are retiring and now causing another by-election, so we are having by-elections for by-elections in something that was intended to be a temporary phenomenon.

As the House knows, I am afraid the Government have always refused to make any changes. But I am an optimist. There is a glimmer of light at the end of the tunnel. We have heard from the Prime Minister repeatedly this week that she is a listening Prime Minister. I wonder whether she will listen to the overwhelming majority of noble Lords in this House, who have said on every test we have had that these by-elections could cease. It might be a U-turn, but these things happen. It would be terrific if the Prime Minister listened to us and ended these ridiculous by-elections once and for all.

My Lords, as the noble Lord, Lord Grocott, rightly points out, this is a very strange way of selecting people. That is because it was designed by the Labour Party when it was in government. A sensible party would have come up with something different. However, the two candidates we have elected today are of a very much higher calibre than many of the candidates appointed over the last few years. More importantly, neither of them has abused parliamentary privilege to interfere with the system of prosecution in this country or disgracefully used their position to destroy and attack the reputations of three very honourable public servants, including my late friend Lord Brittan and the noble and gallant Lord, Lord Bramall. They would never have dreamed of doing that. That in itself has destroyed any possibility of having an appointed House in future.

Business of the House

Motion to Agree

Moved by

That Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with on Monday 24 October to allow the Energy Prices Bill to be taken through committee and report that day.

My Lords, this Motion relates to the Energy Prices Bill, which we are shortly to take. I will briefly explain to the House the rationale for this approach. I am sure noble Lords will be aware that, for Bills considered under an expedited timetable, it is usual for Third Reading to take place on the same day as other stages. However, for this Bill we have scheduled Third Reading a day later, on Tuesday 25 October. This reflects the additional time needed to complete the processes of securing legislative consent for the Bill.

I also take this opportunity to update the House on the deadlines for amendments. The deadline for noble Lords to table amendments for the first Marshalled List for Committee is 4 pm tomorrow. If the Bill is unamended in Committee, the deadline for tabling amendments for Report will be 30 minutes after the conclusion of Committee. If it has been amended, the deadlines will be different. We will advise these to noble Lords in the usual way. Noble Lords will be able to table amendments for Third Reading after the conclusion of Report until the start of Third Reading on Tuesday 25 October. The Chief Whip and I will further update the House as the Bill progresses and details will be available on the annunciators throughout the passage of the Bill.

Motion agreed.

Crime (International Co-operation) Act 2003 (Designation of Participating Countries) (England, Wales and Northern Ireland) Order 2022

Motion to Approve

Moved by

That the draft Order laid before the House on 19 July be approved. Considered in Grand Committee on 18 October

Motion agreed.

Economic Update


The following Statement was made in the House of Commons on Monday 17 October.

“The central responsibility of any Government is to do what is necessary for economic stability. Behind the decisions we take and the issues on which we vote are jobs that families depend on, mortgages that have to be paid, savings for pensioners, and businesses investing for the future. We are a country that funds our promises and pays our debts. When that is questioned, as it has been, the Government will take the difficult decisions necessary to ensure that there is trust and confidence in our national finances. That means decisions of eye-watering difficulty, but I give the House and the public this assurance: every single one of those decisions, whether reductions in spending or increases in tax, will be shaped through core compassionate Conservative values that will prioritise the needs of the most vulnerable. That is why I pay tribute to my predecessors for the energy price guarantee, for the furlough scheme and, indeed, for earlier decisions to protect the NHS budget in a period in which other budgets were being cut.

I want to be completely frank about the scale of the economic challenge that we face. We have had short-term difficulties, caused by the lack of a forecast from the Office for Budget Responsibility alongside the mini-Budget, but there are also inflationary and interest pressures around the world. Russia’s unforgivable invasion of Ukraine has caused energy and food prices to spike. We cannot control what is happening in the rest of the world, but when the interest of economic stability means that the Government need to change course we will do so, and that is what I have come to the House to announce today.

In my first few days in the job, I have held extensive discussions with the Prime Minister, Cabinet colleagues, the Governor of the Bank of England, the OBR, the head of the Debt Management Office, Treasury officials and many others. The conclusion I have drawn from those conversations is that we need to do more, more quickly, to give certainty to the markets about our fiscal plans and to show through action and not just words that the United Kingdom can and always will pay our way in the world. We have therefore decided to make further changes to the mini-Budget immediately rather than waiting until the medium-term fiscal plan in two weeks’ time, in order to reduce unhelpful speculation about those plans.

I am very grateful for your agreement, Mr Speaker, about the need to give the markets an early brief summary this morning, and I welcome the opportunity to give this House details of those decisions now. We have decided on the following changes to support confidence and stability. First, the Prime Minister and I agreed yesterday to reverse almost all the tax measures announced in the growth plan three weeks ago that have not been legislated for in Parliament. We will continue with the abolition of the health and social care levy, changes to stamp duty, the increase in the annual investment allowance to £1 million and the wider reforms to investment taxes, but we will no longer be proceeding with the cuts to dividend tax rates, saving around £1 billion a year; the reversal of the off-payroll working reforms introduced in 2017 and 2021, saving around £2 billion a year; the new VAT-free shopping scheme for non-UK visitors, saving a further £2 billion a year; or the freeze on alcohol duty rates, saving around £600 million a year. I will provide further details on how alcohol duty rates will be uprated shortly.

Secondly, the Government are currently committed to cutting the basic rate of income tax to 19% in April of 2023. It is a deeply held Conservative value, a value that I share, that people should keep more of the money they earn, which is why we have continued with the abolition of the health and social care levy. But at a time when markets are asking serious questions about our commitment to sound public finances, we cannot afford a permanent discretionary increase in borrowing worth £6 billion a year. I have decided that the basic rate of income tax will remain at 20%, and it will do so indefinitely until economic circumstances allow for it to be cut. Taken together with the decision not to cut corporation tax and restoring the top rate of income tax, the measures I have announced today will raise about £32 billion every year.

The third step I am taking today is to review the energy price guarantee. That was the biggest single expense in the growth plan and one of the most generous schemes in the world. It is a landmark policy for which I pay tribute to my predecessor, my right honourable friend the Member for Spelthorne (Kwasi Kwarteng), and it will support millions of people through a difficult winter, reducing inflation by up to 5%. I confirm today that the support we are providing between now and April next year will not change, but beyond next April the Prime Minister and I have reluctantly agreed that it would not be responsible to continue to expose the public finances to unlimited volatility in international gas prices. I am announcing today a Treasury-led review into how we support energy bills beyond April of next year. The review’s objective is to design a new approach that will cost the taxpayer significantly less than planned while ensuring enough support for those in need. Any support for businesses will be targeted at those most affected and a new approach will better incentivise energy efficiency.

There remain, I am afraid, many difficult decisions to be announced in the medium-term fiscal plan on 31 October when, I confirm, we will publish a credible, transparent and fully costed plan to get debt falling as a share of the economy over the medium term based on the judgment and economic forecasts of the independent Office for Budget Responsibility. I would like to thank the OBR, whose director, Richard Hughes, I met this morning, and the Bank of England, whose governor, Andrew Bailey, I have now met twice. I fully support the vital independent roles that both institutions play, which give markets, the public and the world confidence that our economic plans are credible and rightly hold us to account for delivering them.

I also want more independent expert advice as I start my journey as Chancellor, so today I am announcing the formation of a new economic advisory council to do just that. This council will advise the Government on economic policy, with four names announced today: Rupert Harrison, a former chief of staff to the Chancellor of the Exchequer; Gertjan Vlieghe from Element Capital; Sushil Wadhwani of Wadhwani Asset Management; and Karen Ward of JP Morgan.

We remain completely committed to our mission to go for growth, but growth requires confidence and stability, which is why we are taking many difficult decisions—starting today. But while we do need realism about the challenges ahead, we must never fall into the trap of pessimism. Despite all the adversity and challenge we face, there is enormous potential in this country, with some of the most talented people, three of the world’s top 10 universities, the most tech unicorns in Europe, one of the world’s great financial centres, and incredible strengths in the creative industries, science, research, engineering, manufacturing and innovation.

All that gives me genuine optimism about our long-term prospects for growth but, to achieve that, it is vital that we act now to create the stability on which future generations can build. The reason the United Kingdom has always succeeded is because, at big and difficult moments, we have taken tough decisions in the long-term interests of the country, and, in a way that is consistent with compassionate Conservative values, that is what we will do now. I commend this Statement to the House.”

My Lords, I hope we can get back at some point to hearing Ministers repeat Statements; I think it would be helpful to the House.

After listening to the Chancellor read his Statement on Monday, I came to the conclusion that Jeremy Hunt is either the luckiest or the unluckiest man in politics. He is unlucky in that he stood twice and failed twice to become leader of the Conservative Party and take over as Prime Minister. Perhaps he is lucky in that, despite being left out of the Cabinet because he did not back Liz Truss, he is now the most powerful person in government—he certainly has more authority than the Prime Minister—but he is unlucky again because he is the man inheriting the mess of the long- term damage inflicted on the economy in just 38 days by Kwasi Kwarteng. Worse than that, the co-architect of the policies that have caused such immediate turmoil—the person whose vision the former Chancellor said, in his resignation letter, he was following—technically remains in the top job.

The appointment of Jeremy Hunt as the fourth Chancellor in almost as many months and his first Statement on Monday may have brought some welcome, relative calm to the markets, but only because he signalled that he was undoing almost everything in the Prime Minister’s mini-Budget. Yet real harm has already been inflicted and the medicine on offer is even more pain for businesses, households and families across the country. Our economy is now weaker, as is our credibility across the globe, with international commentators likening our problems and economy to those of Greece and Italy rather than to any of the major economies.

There is further damage to public services, now threatened with additional painful cuts as the Government seek to regain market confidence. Most damning of all, for a party that has claimed economic competence in the past, is the damage to peoples’ hopes and aspirations as they are priced out of buying their first homes, renewing their mortgages or finding a rental property on a tightened budget.

We have also seen damage to the Prime Minister, who has lost the confidence of the public, Parliament and her own party. It is embarrassing when across the world the media picks up on the Economist editorial that says the Prime Minister’s likely shelf-life is shorter than that of a lettuce. Let us face it: the only reason she is still there is because her MPs know—as does this House—that they cannot change yet another leader without going to the country for a general election. It is a case of when, rather than if, she is forced out. I suspect there will be possibly a huge sigh of relief from the Benches opposite, most of whom have been quite honest with us and never supported her in the first place, having recognised that her fiscal plans were, in the words of Rishi Sunak, “fantasy economics”. Yet she and her first Chancellor pressed ahead, and the country is now paying a very high price.

We all recognise that there are huge global economic problems that need careful handling with immediate and short-term management and long-term planning, but this current crisis was made in, and existing problems were made worse by, Downing Street. They were not made in the US Federal Reserve, nor on the front line in Ukraine. One of the reasons why I hoped that the Minister would read out the Statement is because there is a line in it that I thought was astounding. It was when the Chancellor said:

“We have had short-term difficulties, caused by the lack of a forecast from the Office for Budget Responsibility alongside the mini-Budget”.

Seriously, whose fault was that? The Government silenced the OBR at the very time it would have been of most help. That was utterly disgraceful.

This whole saga has proved that the Government, and perhaps the wider Conservative Party, do not have the understanding, the knowledge or the right experiences to get our country back on track. While MPs hold back-room talks about the fate of the Prime Minister, interest and mortgage rates just go up and up. This is not a party game, where the job of PM is shuffled around like a game of pass the parcel. As for the Government’s growth plan, the only things that seem to be growing at the moment are inflation and mortgage rates. Today, ONS statistics suggest that food inflation is even higher than regular inflation, currently at more than 14%.

Yesterday, and I do not know whether the noble Lord the Lord Privy Seal will recall this, I asked him what I thought was a straightforward question: what do the Government say to those whose mortgage bills will be hundreds of pounds higher each month following the mini-Budget shambles? He did not answer the question. He did, however, concede that his son and other first-time buyers face a desperate plight in the current circumstances. I am going to try again to get an answer to what I think is a very pertinent question: as mortgage bills go up by £500 and more a month, what do the Government say to those paying such a high price for what was a staggeringly incompetent mini-Budget?

While the noble Lord revisits that question, perhaps he could also reconsider a question posed last Thursday by my noble friend Lord Tunnicliffe. We understand that the Bank of England is assessing the likely number of property repossessions in the coming months. Is the Treasury making its own assessment of that, because it could have a major impact on policy-making? If it is, when will Ministers have the information and the figures, and how would they be used to influence future government policy to avoid such repossessions? If this assessment is not being undertaken, can the noble Lord explain to the House why not?

One of the unexpected developments in the Chancellor’s Statement was the decision to U-turn on the energy price guarantee. Despite the Prime Minister having spent the weeks since the mini-Budget trying to reassure the public that they had certainty on their energy bills for the next two years, Jeremy Hunt has now torn up more of her plans. Is the noble Lord able to outline when the Treasury’s review of energy prices is likely to conclude? When will we hear more about the targeted scheme that will take effect, even though it is not until April 2023, after the winter bills? I would be grateful for a straight answer on this question: why, even at this stage, are the Government still not committing to extending the windfall tax on the excess profits of energy firms?

Early analysis suggests that reverting to a price cap, as the Government are now saying, would see bills rise to about £4,500. Where are families supposed to find that extra money—especially once you factor in increased mortgage costs, food costs, fuel costs, and, probably, rents? Will there be support for businesses beyond April, or will they have to fend for themselves? One of the key justifications for the so-called growth plan was to bring inflation down, but it is still rising. If energy prices rise again that will further fuel inflation—and, as a result, even more interest rate hikes. It is a Catch-22 of the Government’s own making, with the consumer paying the price.

However often the Conservative Party changes leaders or Chancellors, it will not restore that lost financial credibility of the last few weeks. We desperately need a genuine plan for long-term growth. We desperately need policies to support working people, rather than continually making life harder for them. I have often spoken, both here and at other events, about the positive case for politics, and the need for politics to be a force for good and to offer hope for the future. Under this Government, nobody now expects that. All we ask is that it does not get any worse.

My Lords, when I think of the noble Lord, Lord True, a number of words normally spring to mind. However, the word which springs to mind today is not normally on that list—it is “sympathy”. I have great sympathy for the noble Lord having to defend the Government’s action on their fiscal policy as he is being asked to answer questions on the most comprehensive government U-turn in his and most of our political lives. Never mind the Prime Minister: I am sure he must have been inclined to hide under his desk. But we are extremely grateful to him that he chose not to do so.

To read or listen to the Chancellor’s Statement, you would think that the screeching reversals of policy which it contains had nothing to do with the actions of the Government themselves—actions they took only three weeks ago. The Statement stresses the necessity of there being “trust and confidence” in the national finances. It acknowledges that trust and confidence have evaporated. It therefore reverses virtually all the tax changes announced on 23 September that had not already been reversed and then says that “decisions of eye-watering difficulty” will still be needed to restore economic stability.

There is no acknowledgement that the only reason the Statement was necessary and the only reason there was a collapse in trust and confidence was because of the actions of the Government. There was no contrition or apology. Instead, as the noble Baroness pointed out, there was the ludicrous suggestion that the only reason why we have a crisis is that the 23 September Statement was not accompanied by a forecast from the Office for Budget Responsibility—one which, incidentally, the OBR offered to produce and the Government refused.

In fact, the only reason we have a crisis is that the Government acted with breathtaking irresponsibility and in the amazingly naive belief that the markets would believe that future shortfalls in government finances could be met by completely implausible projections for future growth in GDP. What the crisis has demonstrated is that the markets are not as naive as the Government and that no Government can buck the markets simply by a combination of bluster and chutzpah.

The silver lining is that, for the foreseeable future, no UK Government, inspired by either right-wing or, for that matter, left-wing ideology, will dare to try to pull the same trick again. But in the short term we are faced with the eye-wateringly difficult decisions which the Chancellor is set to announce on 31 October. It looks as though these decisions will concentrate on public expenditure cuts. There is some suggestion that the Government are revisiting the possibility of a windfall tax on the oil and gas producers to produce real revenue, which is long overdue. But that is only a small part; the main thing will be big cuts in public expenditure.

There is a whole range of questions relating to these possible cuts which I would like to put to the noble Lord. I would like to ask whether benefits will be uprated in line with inflation rather than earnings. I would like to ask about the future of social care provision. I would like to ask about possible further cuts to overseas aid. I would like to ask what level of support the Government will be able to provide for energy bills beyond next April, and what the consequences of the withdrawal of support will be on the level of inflation. I would also like to ask which infrastructure projects will be culled and, in particular, whether the Prime Minister is still committed to the creation of a new railway line across the Pennines. But I realise that there is no point asking those questions today, because the noble Lord will reply simply that everything is currently on the table and I will have to wait until 31 October and, in the case of the longer-term support for energy bills, until the Treasury review is complete.

So instead of asking those questions, I will ask him simply this. What precedent is there for a British Prime Minister being forced to completely reverse the core elements of her programme and remaining in office? What mandate do the Government have for implementing swingeing public expenditure cuts precipitated by their own incompetence? And why do they not now do the decent thing, namely resign and let the people choose who they want to sort out this mess?

My Lords, if the call for my resignation was an expression of Liberal Democrat sympathy, I am very grateful for it, but I cannot oblige the noble Lord.

Noble Lords know the situation outside the United Kingdom—I was also asked about the United Kingdom and will come on to that directly. The noble Baroness opposite agreed that there are global issues related to interest rates. I do not think that, in such an intelligent House as this, we should pretend that the issue of rising interest rates across the world is something somehow confected in the City of Westminster. These are grave problems which people are not used to dealing with, having had low interest rates for a number of years, but they are problems that we will have to discuss and address in a mature way.

The noble Baroness talked about inheriting a mess. I have to say—I can share this with my Liberal Democrat colleagues—that I think the 2010 coalition Government knew a lot about inheriting an economic mess after the party opposite had driven the economy literally into the ground.

On undoing everything, which was another point that the noble Baroness made, major parts of the Government’s package to help people—I underline that—remain in being, in particular to help the most vulnerable people. I said yesterday in our brief exchanges that we have already reversed the national insurance increase, which I think was welcome, for workers and businesses across the country—I think the Labour Party was in support of that—and we are just about to discuss a major package to help people with energy bills.

I am asked about the energy review, and it is true that my right honourable friend the Chancellor said that we were going forward and would be looking at whether the forward-looking support on energy could be better focused on the most vulnerable households and those least able to pay—I believe that the parties opposite thought that help should be focused on the most vulnerable and those least able to pay. That review will continue; obviously, I cannot give a precise date for its outcome, but it will issue well in time to deliver for people a sense of what they will be in going forward. However, this winter, in the midst of the crisis, the extraordinary degree of help that the Prime Minister announced immediately on her becoming Prime Minister will go ahead, and it is important that that is not forgotten.

On mortgage rates, I apologise if I referred to a personal case; I always try to see every policy in every part of government not in a personal way but in the way it affects people—that is how you wisely make policy, not necessarily always from think tank documents. As the noble Baroness knows, the pricing of mortgages is a commercial decision for lenders, in which government does not intervene. However, the Treasury is regularly in contact with mortgage lenders on all aspects of their mortgage business to understand their position and the current lending conditions, including, recently, at the former Chancellor’s round table with retail and challenger banks on 6 October.

I repeat that interest rates and mortgage rates have been rising since last autumn in response to global trends, which include—but obviously not exclusively—as my noble friend Lord Forsyth pointed out yesterday, Putin’s illegal invasion of Ukraine. It is not just here in the UK, as I said at the outset of this response; the US Federal Reserve has been raising its base rate since March 2022. I recognise that the Government have a responsibility to provide stability for markets, including for mortgages, and that was one of the reasons why we have taken immediate action, as we have, to ensure the UK’s economic stability and provide confidence in the Government’s commitment to fiscal discipline.

Those of us who remember the terrible inflation rates of the 1970s will never forget its impact on families and businesses, and we well understand that families across the country are struggling with rising prices and higher energy bills. I repeat that this Government will prioritise help for the most vulnerable while delivering wider economic stability and driving long-term growth to help everyone.

On energy, I referred to the energy price package for the winter, which will go ahead.

I must point out that a windfall tax is a one-off tax. However, as I said yesterday, there is already a tax levy on the income of energy companies. That already exists, having been introduced by this Government.

On public spending, as the noble Lord, Lord Newby, said, a Statement will be made shortly by my right honourable friend the Chancellor, and the noble Lord knows that I cannot anticipate that. I can say, as my right honourable friend the Prime Minister said today, that the pensions triple lock will stand. I think that will give a great deal of reassurance to many noble Lords and to those following our debate.

I think my time is up but if I have not answered any questions, particularly on the point about repossessions which the noble Baroness made, I will write to noble Lords. I am sure that those factors will be taken into account by my right honourable friend, but I will get a response on that.

My Lords, does not my noble friend the Minister think it remarkable that, with soaring interest rates worldwide, a dangerous war in Ukraine and double-digit inflation in this country and elsewhere, the opposition parties have nothing to say by way of remedy other than that we should reduce the term of the Prime Minister to less than that of a fruit-fly and plunge the country into a general election? Is that not why this country needs this Government at a time when people are worried sick about how to pay their bills?

My Lords, Labour’s spending commitments are about as opaque as the Government’s current ones but at least we are going to publish ours shortly. We all wait to hear what the Labour Party might say. It will face the same constraints on tax and spending as this Government. It has committed to massive excess expenditure but we have seen few revenue-raising proposals. Indeed, the windfall tax would be a one-off and would raise significantly less than Labour suggests. In conclusion, if this does not take away from people’s problems and fears—people are worried about mortgages, interest rates and inflation—let me say that the current central bank interest rate is lower than it was in 11 of the 13 years of the Labour Government after 1997, when average rates approached 5%.

My Lords, the Minister and the noble Lord, Lord Forsyth, referred to the global trends that are causing such mayhem in various countries, including our own. However, those trends were in evidence more than three weeks ago. Can the Minister tell us what the then Chancellor had in his so-called mini-Budget that was not agreed—indeed, encouraged—by the then Prime Minister?

My Lords, I am not answering for my right honourable friend the former Chancellor of the Exchequer. I am stating to the House that, given the circumstances we are in and the position I have outlined, the Government, with the intention of ensuring the UK’s economic stability in response to events, have published a way forward. We have published proposals on the fiscal side and will shortly publish proposals on the spending side.

My Lords, if this crisis is all a global crisis, as the noble Lord, Lord Forsyth, claims, why was the gilt market’s immediate reaction to Chancellor Kwarteng’s Statement to increase long-term interest rates in this country to higher levels than they are for Italy and Greece?

My Lords, the noble Lord is pretty well informed about the economic position in other European countries. He will know well that there are grave inflationary problems and problems with interest rates across Europe. There has already been a successful gilt sale this week; I have no doubt that it will continue.

My Lords, I do not pretend to know the ins and outs of exactly where we find ourselves but I serve communities in the north. I think particularly of people I have met recently in Middlesbrough and Hull, where there were great hopes for levelling up. It now seems a distant dream. I recently visited a school where children go in the morning with an empty lunch box for them to fill up with food from the food bank in the playground at the end of the day. The budget for school meals has gone up by 2% yet food inflation has gone up by more than 10%. We need to make tough decisions—I am glad to hear that the triple lock will remain in place—but, on behalf of the communities where I serve, I must ask this: will benefits rise in line with inflation? If not, millions of people will be moved into poverty. Those who recently donated to food banks are now visiting them themselves.

My Lords, I reiterate that the purpose of the Government is certainly to help those who are vulnerable and those living in some anxiety at the moment. That is one of the reasons why we are looking at ways of concentrating the energy help on the most vulnerable as we go forward, after dealing with the immediate crisis. I assure the most reverend Primate that the levelling-up programme will continue. Many of the growth measures that were announced will also continue. I hope that if local authorities in his area wish, for example, to set up investment zones to attract jobs and investment in the way that the Government would like to see, then he will, with his great leadership role in the community, give support to such propositions.

My Lords, until about a week ago, the whole Cabinet and most of the Members opposite were proclaiming that the only way to deliver growth was through a whole suite of tax cuts. We now know that almost all those tax cuts have been reversed, so what is the plan for growth, how much growth does the Minister expect, and when can we start seeing the measures that will deliver the growth that we need in this country?

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

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

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

My Lords, the noble Lord did not answer the very specific question from the most reverend Primate about benefits uprating. On Monday, the Chancellor told MPs that

“all these decisions will be taken through the prism of the impact on the most vulnerable people in society.”—[Official Report, Commons, 17/10/22; col. 429.]

Many of the most vulnerable people in society rely on social security and, as we have already heard, the inflation rate they face is actually higher than the 10% announced today. Given this, is there not a strong case for the Government to announce now that they will uprate benefits in line with inflation to reduce the anxiety being faced by people who are, as we have heard, already struggling to make ends meet?

My Lords, it is absolutely true that people across the United Kingdom are worried about the cost of living. I apologise if I did not answer the question from the most reverend Primate; I will answer it now, but it might not be the full answer required. It is not always easy to remember everything that one is asked at the Dispatch Box, so I sincerely apologise to the House. The Government have announced £37,000 million of support for the cost of living this financial year. We have the energy price guarantee and the energy bill relief scheme, which will help millions of households. We are supporting millions of vulnerable households, which will receive £1,200 in one-off support, with additional support for pensioners and those claiming disability benefits, as the noble Baroness knows.

However, obviously the issue of uprating benefits and other aspects of government spending are being considered in totality. The Work and Pensions Secretary is conducting her annual review of benefits and I promise the noble Baroness that more will be said on this in the medium-term fiscal plan.

My Lords, has the noble Lord seen the recent article in the Financial Times that suggests that a future Government of any complexion will simply be a creature of the bond markets and not the other way round? Does he agree, and is that a good thing?

I do not know that I do agree. I fear that I am not the most assiduous reader of the Financial Times—certainly not its editorial copy. The Government’s aspiration is to serve the people, not the bond markets.

My Lords, I just point out to the Minister that, even with the list of flimsy growth measures he just described, Goldman Sachs forecast a 1% drop in output in the UK next year—so a recession. That is on the back of these policy announcements. I push him on this: today at Prime Minister’s Questions, if I understood the Prime Minister correctly, she said that there would not be cuts to public spending. She even implied that there would be growth in public spending. Could the Minister clarify if, once again, she was talking in nominal terms—or cash terms, as it is sometimes called? If it is not in real terms, swingeing cuts are on the way.

If it is £1 less in real terms, that is an interesting definition of a swingeing cut. A medium-term fiscal plan is going to be published shortly. The noble Baroness and I go back a long way and I have great respect for her, but I suggest she waits for that. I believe the noble Baroness still has interests in the lovely California, so she should understand, from her knowledge of the United States, that there are international issues at play.

My Lords, does my noble friend recognise that there will be real difficulty finding anything like the necessary savings by cutting public expenditure? There will have to be some increases in tax. Does he recall that, in the 1980s, my noble friend Lord Lawson aligned capital gains tax and income tax, and said there was no justification whatsoever in capital gains tax being less than income tax? Reintroducing that progressive Conservative policy would save some £14 billion. Will he commend that to the Chancellor?

My Lords, I am not going to be drawn on anything in relation to what may be in the medium-term fiscal plan, but I am sure that the Chancellor reads your Lordships’ Hansard closely.

My Lords, my question follows on from that from the Cross Benches. A surprisingly little remarked element of the Statement is the creation of an economic advisory council with four names. These are a BlackRock portfolio manager, a hedge fund manager formerly at Deutsche Bank and JP Morgan, a hedge fund owner formerly of Goldman Sachs, and a JP Morgan employee formerly of HSBC. The financial sector represented 8.3% of the UK’s total economic output in 2021. Does the Minister see a problem with the composition of this panel? Is it appropriate in representing just a tiny, politically privileged part of the UK economy, about half of the input of which comes from London, drawing on the point made by the most reverend Primate?

I am not going to comment on the appointment of advisers, but I am sure that those named, if the noble Baroness has named them correctly, will give the best advice they conceivably can. Often from Green Benches we hear attacks on the financial services sector, and it is quite astonishing that the Scottish Greens in government should adhere to this kind of visceral opposition to financial services. There are more than 2.3 million jobs in financial services, and two-thirds of those are outside London in finance hubs including Belfast, Birmingham, Cardiff, Edinburgh, Glasgow, Leeds and Manchester. Financial and professional services contributed nearly £100,000 million pounds in taxes in 2020.

My Lords, will my noble friend accept that what is crucial at the moment is that in the country as a whole there should be real confidence in the credibility and the competence of the Government, and that that means there has to be a Prime Minister who is entirely credible and who enjoys the full confidence of the country, as I believe the Chancellor now does.

My Lords, the Minister said that the triple lock is guaranteed. At the Conservative party conference, the Prime Minister said it was guaranteed. On Monday, the Chancellor said that he could not guarantee it. Today, the Prime Minister now says she can guarantee it, yet it is the Chancellor who is going to make the Statement on the 31st. Why are we expected to believe that there will not be another U-turn? Can the Minister make sure when he goes to the Cabinet that there is no such U-turn?

I have set out the position to the House. That was a good try by the noble Lord but this morning the Prime Minister made a statement in the House of Commons on the pensions triple lock, and that is the position of His Majesty’s Government.

Does my noble friend agree that alongside supporting families and businesses with their energy costs, it is critical that we work to secure our own long-term energy supplies?

Yes, I agree with that, and my noble friend Lord Howell of Guildford has been so wise on this point for such a very long time. Again, this may involve difficult decisions and reflections, and some people may have to lay aside some of their prejudices in the national interest. We will be giving very careful thought to seeking to move towards greater energy independence. I hope that that goal, which must be in the national interest, will allow all of us from different points of views to temper some of our ardour in the collective public interest.

My Lords, the Minister has been very generous with his time. He has made a number of comments about the integrity of the Government now in place and has stressed the need to go forward, working with the team he has. Can he comment on the fact that the Home Secretary has now resigned?

My Lords, obviously, I cannot comment on information to which the noble Lord is privy. I am here as Leader of the House of Lords to serve your Lordships’ House. I give priority to serving your Lordships’ House and have not been looking at WhatsApp during this exchange of views.

My Lords, I am grateful for that; the noble Lord is always helpful to this House. It would be helpful if we could have confirmation. The rumours are now that the Home Secretary has been sacked from her post. Given what has been said today about the necessity of a strong and stable Government, can he report back to your Lordships’ House at some point? There are probably Members of this House who would be happy to serve. That might be an answer to help out the Government.

Public Order Bill

First Reading

The Bill was brought from the Commons.

Some Lords objected to the First Reading.

My Lords, it has been suggested that we might adjourn for five minutes while we just double-check the rules.

Sitting suspended.

My Lords, it might be helpful to read from the Companion about the status of a First Reading:

“The Question is put from the Woolsack. The first reading of a bill is agreed to without dissent or debate, both as a matter of courtesy and because the House has no knowledge of the contents of the bill until it is published.”

On that basis, I beg to move that this Bill is read a first time.

My Lords, that is a very helpful answer but if that is the case—and it is—why does the chair have to say “Content” or “Not Content”? Does it not make this House look even more stupid?

Can I just endorse the comments from the Government Chief Whip? It is a formal process; let us get on with the business.

The Bill was read a first time and ordered to be printed.

Product Security and Telecommunications Infrastructure Bill

Third Reading

My Lords, I have it in command from His Majesty the King to acquaint the House that His Majesty, having been informed of the purport of the Product Security and Telecommunications Infrastructure Bill, has consented to place his interest, so far as it is affected by the Bill, at the disposal of Parliament for the purposes of the Bill.


Moved by

My Lords, I beg to move that this Bill do now pass. I thank noble Lords on all Benches—noble friends behind me and noble Lords across the House—for their co-operation on this Bill. We saw it as vital for the UK to remain at the forefront of the global economy. It is important that we see fast, reliable but secure connections, for they are the cornerstone of a modern, thriving knowledge economy and society.

It is important that families, communities and individuals as well as state and non-state organisations have reliable tech that works in every part of the country, however remote. That is why the Government have made huge investments in digital infrastructure and have ambitions to become a global cyber power.

We have spent £5 billion on Project Gigabit to get lightning-fast, reliable broadband to hard-to-reach places, and legislated to address absent or unresponsive landowners holding up the deployment of gigabit-capable broadband in blocks of flats. It is also why the Government have a £2.6 billion National Cyber Strategy to protect and promote the UK. This year, we completed a consultation on new laws to strengthen UK cyber resilience.

However, we want to do more; we want to go even further and tackle the challenge that the country is facing. Throughout this Bill’s passage, Ministers and officials have listened carefully to industry, to noble Lords and to the other place, to address concerns and improve the legislation.

We included updates to give telecoms operators further rights in respect of telegraph poles, supporting the delivery of gigabit-capable broadband. We listened carefully to the Delegated Powers and Regulatory Reform Committee to subject the provisions in Part 1 of the Bill to appropriate scrutiny. The product security provisions have been backed by industry, and other countries are following suit. As a global leader in the cybersecurity landscape, this Bill is the first domestic legislation in the world to establish a framework that will introduce security requirements for these products. We now have a Bill that is equipped to deal with the changing landscape of cybersecurity as new threats emerge and evolve in future years. Once it comes into force, the measures in it will improve connectivity and resilience against cyberattacks in the UK.

Let me end by once again thanking noble Lords and Members in the other place for their contributions. I thank the Front Benches and my noble friends here for their wisdom and commitment. I thank noble Lords across the House and the parliamentary clerks, without whom we would not be attending this debate today. I should also pay tribute to my predecessor, my noble friend Lord Parkinson of Whitley Bay—I say “I should” but I want to—for so expertly taking the Bill through Committee stage in this House.

I also hope all noble Lords will join me in thanking the Bill team for their engagement, in particular Lindsey Cox, Colum McGuire and Anna Kerby. I thank Thomas Stukings and Poppy Woodcock in my private office—they wrote the speech, not me. They deserve praise. I also thank everyone in the policy and legal teams who worked tirelessly to get this Bill to where it is. Before I break into an Oscar awards-type speech, I also recognise that there may be a need for further conversations on one or two issues. I reassure noble Lords that I remain open to further meetings with them to deliver this important legislation.

My Lords, on the face of it, this Bill might have looked purely technical, but it will affect the day-to-day lives of millions up and down the country. It improves security for smart devices—products which are now second nature to so many of us. We know there will be regulations to follow and that the devil will be in the detail; we look forward to examining that detail. The Bill will also assist the installation of infrastructure and support greater connectivity, whether through wired broadband or wireless 5G networks.

From these Benches, I thank the ministerial team, who have been courteous, professional and ever willing to engage in meetings and discussions. To refer to the ministerial team of three on this occasion, I would like to say how grateful I am to the noble Lord, Lord Kamall, who cut his DCMS teeth on this Bill. My thanks also go to the noble Lord, Lord Harlech, who recently joined the Government Front Bench, and the noble Lord, Lord Sharpe, who bought his Home Office experience to bear. I also associate with myself with the comments of the noble Lord, Lord Kamall, in expressing my particular thanks to the former Minister, the noble Lord, Lord Parkinson.

From these Benches, we are also grateful to the Bill team, the ministerial office team, the clerks, the staff of the House—indeed, all those who worked front of house as well as behind the scenes to make this Bill possible. As ever, it has been my pleasure to work with my noble friend Lord Bassam, who has brought his valuable experience and knowledge to bear. We were very fortunate to have the highly professional support of Dan Stevens, our excellent adviser who has guided and advised us throughout, to whom we express our thanks. Of course, my thanks are also due to all noble Peers who have worked in a cross-party and constructive fashion on this Bill.

I am very glad that the Government listened to a number of noble Lords regarding the delegated powers in the Bill, and that a particular amendment was brought forward to enhance operators’ rights in respect of telegraph poles. I thank the noble Baroness, Lady Harding, for her work on this issue.

Finally, I hope that the Minister will recognise that the amendment passed by your Lordships’ House, which requires an independent review of the Electronic Communications Code, offers a sensible and important way forward on a number of outstanding and key issues, including access to multiple-dwelling units and land valuation. These matters need resolution, and I therefore hope that the Government will take this amendment seriously ahead of the Bill’s return to the other place.

My Lords, I add my thanks to the Minister, the noble Lord, Lord Kamall, the noble Lord, Lord Sharpe, and their team, and of course to the Minister’s predecessor, the noble Lord, Lord Parkinson. I would describe him as “urbane”— I can flatter him now that he is no longer a Minister.

I also thank the noble Baroness, Lady Merron, and the noble Lord, Lord Bassam, on the Labour Front Bench for making common cause on so many issues, and quite a number of Cross-Benchers and Conservative Back-Benchers who have played such a prominent role in trying to improve the Bill with their expertise alongside external organisations—such as Which?, Protect and Connect, ISPA and CityFibre—which have been so helpful in their briefings. However, my particular thanks are due to my fellow in arms, my noble friend Lord Fox—who has borne at least half the burden of this Bill with me and was described rightly in Committee as a “supersub” by the noble Lord, Lord Bassam—and, very importantly, to the very expert Sarah Pughe in our whips’ office. I thank in particular the noble Lord, Lord Kamall, for his efforts; this was his first DCMS Bill, but I am sure it will get worse.

I am pleased that the Government have made some concessions and given assurances during the course of the Bill, particularly about the regulations to follow. However, on the central aspects of not specifying enough in primary legislation in terms of security requirements for IoT devices and the retention of unfair valuation and ADR provisions, the Bill is ultimately disappointing. I hope that the Minister will ensure that the review mechanism is retained and does not return to this House.

In general, the objectives on all sides of the House are not very different, but I must say that the Government’s one gigabit strategy really has seemed to mutate throughout the course of this Bill, so I do not believe that there is a great deal of clarity yet on when the Government’s strategy is actually going to be accomplished. In general, as regards retaining the review mechanism, a little willingness to accept this might earn this Government just a few, badly needed friends out there—they might find that quite useful at the current time.

My Lords, first, I apologise for my unavoidable absence at Report last week, but I add my belated welcome to the Minister on his appointment and thank him for writing today, as well as my appreciation to his predecessor, the noble Lord, Lord Parkinson. On product security, I certainly wish this Bill well. I am somewhat less enthusiastic about its telecommunications infrastructure measures, particularly on the matter of valuation.

I express my thanks to the clerks and the wonderful co-ordination run from the Liberal Democrat offices. I thank colleagues who spoke in favour of the valuation amendments that I tabled at earlier stages, particularly the noble Earl, Lord Devon, who cannot be here today, and the noble Lord, Lord Cromwell, who I am glad to see is in his place. I also thank noble Lords across the House—I am extremely grateful, particularly for the Labour amendment of last Wednesday, so ably pressed by the noble Baroness, Lady Merron, which really remains the only man standing on the measures that might ultimately address market concerns on telecoms sites. I thank the noble Baroness warmly for that and pledge my support going forward. I pay tribute to the CLA, of which I am a member, the NFU, and other bodies such as Protect and Connect, which we have heard about, for their support and persistence.

Whatever the economic and political rationale, impressions matter and govern transaction analysis—and market confidence also, as we have seen recently in grand style. So I regret that, despite the Minister’s letter of today, a reasoned justification and clear evidence for further interventions into landlord and tenant practice are not apparent to me, especially looking at contractual terms beyond rent. Although as a property practitioner and fellow of the RICS, I believe that these measures are in that sense regrettable, divisive, avoidable and likely to cause the supply of mast sites to shrivel, I appreciate that the Minister demurs and disputes the evidence that has been put forward of lessor reticence, increased legal disputes and slower market process. So we will just have to see. Site providers in the market, their advisers and so on will have to take note, and they may become increasingly wary, not only for what this means in terms of mast rentals but for the wider implications for property rights going forward.

I rise briefly to support the noble Earl, Lord Lytton, and to thank him and his Cross-Bench colleagues, the noble Earl, Lord Devon, and the noble Lord, Lord Cromwell, for the Cross-Bench support that we have enjoyed, together with that from the opposition Benches. My noble friend Lord Northbrook has also fought a valiant fight.

I thought it important from these Benches to place my regret that the 2017 electronic communications code has been harsher in its effects than had previously been anticipated. This was an opportunity to review that. So, while I did not support the Labour Front-Bench amendment, this is a good opportunity next door to consider whether there is cause, as I believe there is, to review the legislation at this stage.

I regret the imbalance in relationship that the Bill will expedite between the operators and landowners, many of whom are not private landlords but are sports clubs and others that will find the loss of income quite substantial and very difficult to replace at this time, in particular with the cost of living crisis and the inflation that we have seen. I regret that the alternative dispute resolution mechanism will not be mandatory; perhaps that is something the Government might like to consider when they look at this next door.

I will end on a local note. This is something that potentially could impact very positively in north Yorkshire. However, there are two issues that the Minister may not be aware of, as he is relatively new to this brief. One is that there are a number of existing masts owned by a specific telecoms operator that have not been operational. You have to ask the question, since the permissions have been given and the masts are in place, why on earth are they not being operated, in a place with one of the poorest levels of connectivity in the country. The other is looking at alternatives such as piggybacking on the back of the telecommunications masts that were put in place at public expense for the North Yorkshire Police service. I can see absolutely no reason why we cannot piggyback on the back of those.

With those few words, I wish the Bill well, particularly its Part 1—we will gloss over some of the later parts—as it proceeds in its passage through Parliament.

My Lords, I apologise as, in my quest to be concise, I did not name specific noble Lords and I think it is right that I do that. I thank the noble Baroness, Lady Merron, and the noble Lord, Lord Bassam, for their warm welcome. Indeed, it is a re-welcome from the noble Baroness, Lady Merron; many noble Lords will know that she and I have worked together before—we are inextricably linked. I also thank their adviser, Dan Stevens. I thank the noble Lords, Lord Clement-Jones and Lord Fox, and of course their adviser, Sarah Pughe. We take the credit for it, but these advisers work incredibly hard.

I acknowledge the continuing concerns of the noble Earl, Lord Lytton, and of other noble Lords who spoke on this issue. As I have said, I remain open to further meetings and am very happy to discuss these things. I commend the Bill to the House.

Bill passed and returned to the Commons with amendments.

Energy Prices Bill

Second Reading

Moved by

That the Bill be read a second time.

14th Report from the Delegated Powers Committee, 4th Report from the Constitution Committee

My Lords, Russia’s illegal invasion of Ukraine and its impact on global energy markets have affected families and businesses up and down this country. As we approach winter, this Government have made bold decisions so that homes are kept warm and businesses are kept open. On 8 September, the Prime Minister set out a comprehensive package to tackle rising energy prices. As part of this, she announced that we would bring forward emergency legislation, which is before noble Lords today.

I thank the Opposition and the whole House for their constructive engagement to expedite the Bill. Providing support to those who need it is a shared value across all parties, as seen in Monday’s proceedings in the other place. I also thank the DPRRC for its report on the Bill, published this morning. I welcome its constructive comments on ensuring that the powers in the Bill are appropriately drafted and justified. We will of course be responding to the committee shortly; however, it is important that we remember the context of the Bill and ensure that consumers are able to benefit from the Bill as intended and as I will set out.

The Energy Prices Bill means that consumers will pay a fairer price for their electricity and that no one is left behind. First, the Bill provides the legislative footing for the energy price guarantee, which will protect UK households from soaring energy prices. By reducing the unit cost of electricity and gas, the typical household will have the equivalent of an annual bill of £2,500. Effective from 1 October this year to the end of March next year, the energy price guarantee will provide domestic consumers in Great Britain and Northern Ireland with crucial support in the winter months.

To ensure that support is available up and down the country, an alternative fuel payment will provide a one-off £100 payment to UK households that use alternative fuels for heating. Heat network consumers will also receive a one-off £100 payment. We are exploring delivery routes for the alternative fuel payments in Northern Ireland as well.

The energy bills support scheme was announced earlier this year to provide £400 to support households. I confirm that, through this Bill, households in Northern Ireland will be able to receive equivalent support to those in Great Britain.

The Bill also provides support for non-domestic consumers, such as businesses, charities, schools and hospitals. The energy bill relief scheme will enable the Government to provide financial assistance to all eligible non-domestic organisations in Great Britain and Northern Ireland over the coming winter period. Bills will be reduced by a new government-supported price, which is less than half the wholesale prices anticipated this winter. Discounts apply from 1 October 2022, with an initial period of six months.

In three months, the Government will publish a review to consider how to continue support for non-domestic users, particularly those most vulnerable to energy price rises. The Bill provides that the scheme may be extended to those deemed eligible for up to four consecutive six-month periods. For non-domestic consumers who use heating oil or alternative fuels instead of gas, the Bill will also introduce a non-domestic alternative fuels payment. This support will likely take the form of a flat-rate payment delivered via electricity bills.

This legislation strengthens previous action by requiring, rather than expecting, landlords and other intermediaries to pass on the energy price support they receive to end-users, such as tenants, as appropriate. This applies to the energy price guarantee, to the energy bills support scheme and to the energy bill relief scheme. The Bill will also ensure that heat networks benefiting from the energy bill relief scheme pass through cost savings to their consumers. The Bill will provide for the appointment of an alternative dispute resolution body to handle complaints raised by consumers against their heat network if it has not complied with those pass-through requirements.

Finally, we must protect consumers from paying excessive amounts for this low-cost electricity, while ensuring that no firms are unduly profiting from Russia’s illegal invasion of Ukraine. Wholesale electricity prices are currently set by gas-fired generation, which is the most expensive form of generation. This means that consumers are having to pay over the odds for cheap low-carbon generation. The powers in the Bill will allow us to introduce a temporary cost-plus revenue limit for low-carbon generators that are not currently covered by a contract for difference. This will allow generators to cover their costs and receive an appropriate revenue that reflects their investment commitment and risk profile. The precise mechanisms will be subject to a consultation to be launched shortly, ahead of it coming into force from the start of 2023.

I stress that this is not a windfall tax; this is a targeted intervention to deal with a specific problem that has occurred in the wholesale electricity market. It will help to break the link between abnormally high gas prices and the cost to consumers of low-carbon electricity. We are also legislating for powers that will allow us to offer a contract for difference to existing generators not currently covered by the Government’s existing contracts for difference scheme.

I raised this point about a windfall tax last week, so I thought I would be justified in intervening today. There is an argument that a windfall tax, which is predictable because the suppliers of electricity know what bills they are going to have to pay, is better in terms of promoting long-term investment in renewables, which we desperately need, than this cost-plus arrangement, which is also variable, as I understand it, by ministerial order. That provides no certainty for potential investment.

I am not sure the noble Lord is correct. The reason we have selected this mechanism is that it is a complicated picture; of course, many suppliers would no doubt argue that they have sold ahead their production to energy retailers, et cetera, and therefore the precise circumstances of every individual supplier will determine the arrangements that will be appropriate for them. It is not a windfall tax because a windfall tax would be levied on profits and would go to the Exchequer. This money clearly does not go near the Exchequer; it will go directly to consumers in the form of lower bills.

I mentioned that we will also introduce a contract for difference to existing generators that are not currently covered by the Government’s existing contracts for difference scheme. We hope that many of these suppliers will move voluntarily to contracts for difference payments, which will provide them with secure long-term revenue, and therefore there will be no need to impose this cost-plus mechanism.

The voluntary contract would grant existing generators longer-term revenue certainty and safeguard consumers from future price rises. This Bill is part of the swift, decisive action we are taking to deliver affordable and secure energy in the UK. There are no cost-free actions, but I think the whole House agrees that it would be wrong to do nothing. This Government will always act decisively to support households and help businesses grow. The consequences of not acting now would mean worse economic outcomes going forward; this Bill will provide certainty, reduce inflation and support economic growth. I would welcome the support of noble Lords in ensuring the Bill becomes law and therefore commend it to the House.

My Lords, I confirm to the Minister that we support the passage of the Energy Prices Bill, but can he explain to the House whatever has happened to the Energy Bill, which has been shelved somewhere, waiting for someone to make a decision about its future? Without support, consumers and small businesses would be facing an eye-watering increase in their bills—estimated to be somewhere between £5,000 and £10,000, respectively—so the Government have acted and the Opposition support them in doing so. Having said that, they are in a deep mess entirely of their own making.

To give noble Lords a recent example, on Monday I, and perhaps other noble Lords, received a letter from the Minister inviting me to yesterday’s briefing about this Bill. In the letter, the Minister wrote in the first highlighted, bullet-pointed paragraph:

“The Energy Price Guarantee will ensure that a typical household in GB pays around £2500 a year on their energy bill for the next 2 years from 1 October 2022”.

About half an hour after I received this invitation, this month’s Chancellor announced a screeching U-turn, and the two-year pledge went down to six months. Did no one tell the Minister before he wrote the letter? It reminds me of Prufrock:

“In a minute there is time

For decisions and revisions which a minute will reverse.”

My first overarching question to the Minister is this: can we rely on anything this Government are now saying?

The Energy Prices Bill is facing parliamentary scrutiny after it has been acted on. I thank the Delegated Powers and Regulatory Reform Committee for the report it published this morning, which is in essence a condemnatory judgment of the Government. The Bill has to take effect from 1 October 2022, but what does it do and what does it not do?

The unit price cap will mean an average consumer’s annual bill will rise to £2,500, in contrast to Labour’s fully funded price freeze at about £1,900 from September. There is no additional support for the 15% of off-grid households, in contrast to Labour’s plan which would provide £1,000 of help. There is also no additional support for customers on prepayment meters—4 million households—who use approximately 60% of their energy over the winter months as bills are not smoothed out. This contrasts with Labour’s plan, which would save them an average of £1,300. Ten million families will still spend more than 10% of their income on energy, according to a recent study by the University of York.

I turn to the windfall tax—or non-windfall tax—and how the Government propose to pay for this measure. They have spent the last period in office rubbishing the very idea of a windfall tax as “unconservative”, but in Clause 16 we see a windfall tax in anything but name that the Secretary of State may impose on the energy giants. The clause is titled

“Temporary requirement for electricity generators to make payments”.

I will read it out:

“The Secretary of State may, for a purpose mentioned in subsection (2), make regulations for, and in connection with, requiring periodic payments to be made to a payment administrator by … specified electricity generators … electricity generators that are of a specified description, or … electricity generators that are designated by the Secretary of State in accordance with the regulations … The purposes are … the purpose of enabling a payment administrator to obtain funds for paying to electricity suppliers in connection with reducing the cost to customers of electricity … the purpose of enabling a payment administrator to obtain funds for meeting expenditure incurred or to be incurred by the Secretary of State in reducing the cost to customers of electricity.”

If it sounds like a windfall tax, if it smells like windfall tax—it is a windfall tax. Even John Redwood described it as a “surrogate windfall tax” in the other place. Energy giants are making £170 billion in excess profits, and they may be required to make payments. Let us call it what it is: a windfall tax, and the Government should do it properly. The level set must contribute significantly to the price support for businesses and consumers. The Government must now end the absurd multi-billion-pound loophole in the windfall tax for oil and gas companies. Above all, it must be fair to customers.

Oil and gas companies are currently enjoying a massive loophole for investing in fossil fuels, so why do the Government think it right to leave billions of unearned, unexpected windfall gains in the pockets of oil and gas giants, thereby forcing people to pick up more of the costs of this support in higher borrowing and higher taxes for the future? How can the Government defend tilting the pitch away from cheap, home-grown, low-carbon power in favour of expensive, insecure, planet-wrecking fossil fuels? The powers are ill defined, the size of the levy is unknown and how much it would raise is unclear. How will the Government ensure fairness with a fossil fuel windfall tax?

The Labour Party will bring forward amendments to the Bill. In line with our fully funded policy, we would seek for the energy price guarantee to take effect from 8 September rather than 1 October. The powers in Clause 21, highlighted by the Delegated Powers Committee, and Clause 22, to modify energy licences and issue directions to licence holders, are a power grab by the Secretary of State. They are not compellingly justified and should be subject to proper parliamentary scrutiny, not the negative procedure. The Delegated Powers Committee is disdainful of what it calls “camouflaged legislation” in the Bill, saying it is “inappropriate”.

For the Government to think that the answer to a slow-to-react regulatory regime is to override it by giving powers to the Secretary of State is fanciful, especially now, with confidence in the Government’s handling of affairs at an all-time low. There is no long-term plan to get us out of the crisis. Electricity and gas prices should be delinked, and Labour would require the Government to develop a plan to do this. Consumers need some certainty to be able to plan for their futures.

There is an unfair £5 billion loophole in the existing windfall on fossil fuels, introduced by the previous Chancellor or the one before. For every £1 invested in oil, gas and fracking, companies get back 91p. Nothing like that exists for renewables or nuclear fuel, and we need this to be levelled up.

We would require the Government to report, assessing the impact of reducing the Energy (Oil and Gas) Profits Levy Act investment allowance from 80% to 5%, particularly on bills. We would also require the Government to assess the revenue and profits of electricity generators and oil and gas producers on a six-monthly basis.

On renewables, Defra is seeking to block landowners from developing solar energy farms. Some 0.1% of agricultural land is currently used for solar energy generation. If that is increased tenfold, it would mean that 1% of agricultural land was used in this way. Who does not like solar energy panels, and why not? They are capable of producing the equivalent of what 10 nuclear power stations produce for the country. We previously heard the noble Lord, Lord True, talk about the need for self-sufficiency in energy; this would be a good start.

We will lurch from crisis to crisis if we do not learn the lessons from this one. We must become much more self-sufficient in our energy production. This will mean a sprint for growth in renewables and nuclear, and a massive programme of energy efficiency across the country. The powers are with the Government, and I commend this to the House.

My Lords, on these Benches we too support the broad thrust of the Bill, but like the noble Lord, Lord Lennie, we wonder what it might look like by the time it gets to us in Committee just next Monday. We also share the concern of the Delegated Powers and Regulatory Reform Committee about the unfettered powers being given to the Secretary of State without any time constraint—powers that enable the Secretary of State to make large changes to the sector without consultation or the right to appeal. As others will no doubt point out, we are concerned that the measures in the Bill treat renewables such as wind and solar less favourably than oil and gas. However, I will concentrate on two issues not covered in the Bill which I believe should be.

The Long Title of the Bill is:

“A Bill to Make provision for controlling energy prices; to encourage the efficient use and supply of energy; and for other purposes connected to the energy crisis.”

So, in addition to pricing and supply, the Bill is also meant to be about the efficient use of energy, yet it is hardly mentioned. Unlike those in many other countries, it seems our Government have no strategic interest in encouraging anyone in the UK to save energy. The International Energy Agency describes energy efficiency in priority terms as the “first fuel”. It reckons that at least half of the improvements needed to deliver net zero by 2050 will come from greater energy efficiency. However, in the UK, far too many people cannot use energy efficiently: their homes leak heat because they are poorly insulated. Around 15 million homes are below energy performance certificate band C. In other words, 15 million homes are inadequately insulated, so they cost more to heat—on average, almost £800 a year. Yet in the absence of a clear national programme, home insulation work has plunged by 50% over the past year, leading Doug Parr of Greenpeace to say:

“It’s frankly astonishing that this dip in insulation rates comes at exactly the time we should be ramping up this proven, long-term solution to the cost of living crisis.”

Even the Conservative-inclined Sun newspaper said in August:

“Householders faced with astronomical heating costs need lagging for their homes, not a government lagging behind.”

So, measures to improve energy efficiency should be a top priority for the Government, with a clear strategy and evidence of real commitment.

As the Minister knows, I have spoken many times about the need to establish the Government’s own energy efficiency targets in law. I have argued that it is the retrofit industry that will deliver the Government’s energy efficiency targets, but the industry has lost confidence after being let down by numerous failed schemes. The industry has shrunk, and the amount of energy efficiency work has fallen dramatically. The industry itself argues that to persuade it now to invest in research, training and equipment, it needs the confidence that putting targets into legislation would give. Conservative Ministers, including the current Chancellor, have claimed numerous times to believe in doing just that—enshrining targets into law. A Defra document states:

“A legally binding long-term target gives a clear signal to industry of the direction of future government policy. This may increase investor confidence and encourage industry to invest in infrastructure and research that will drive innovation”.

The Government have two main targets: for all fuel-poor homes to be EPC band C by 2030; and for all remaining homes to be EPC band C by 2035. However, to date, the Government have refused to put those targets into law to make them legally binding as the industry has requested. I have received no credible explanation for this failure, so I will table an amendment to the Bill in Committee. Last night, your Lordships agreed an amendment to the Social Housing (Regulation) Bill which did at least put an energy efficiency target for social housing into legislation. I hope noble Lords will agree that all the Government’s energy efficiency targets should follow suit. I hope the Minister will explain in detail the Government’s plans in relation to energy efficiency and why it is absent from the Bill.

I now turn to another issue I recently raised which I believe should form part of the strategy to improve the supply of energy: the role that solar energy can play. Residential solar systems are already very popular, reducing bills and often being able to supply excess energy back to the grid at times when it is under pressure. I recently installed solar panels on my own home, adding to the 1.2 million homes that have done the same. Together, these domestic solar PV systems have the same generation capacity as the forthcoming nuclear plant at Hinkley Point. We should be encouraging more households to do the same and helping those with existing systems to get them working more efficiently.

In the March Spring Statement, it was announced that certain energy-saving materials would be eligible for a 0% rate of VAT on both labour and parts, and I welcome that. Solar panels and batteries, which store energy from solar panels for later use, are covered if fitted at the same time, but any battery added separately at a later date is not covered. Retrofit batteries will continue to be subject to VAT at 20%. Modern solar systems usually include a battery, but many systems installed just a few years ago do not. With more efficient and cheaper batteries now available, it makes sense for those with older systems to add a battery. The solar energy their panels generate can be used far more efficiently to the benefit of the home owner and the country overall. However, the 20% VAT rate is likely to deter many. I believe that retrospectively added batteries should also benefit from zero VAT and will bring an amendment to that effect in Committee.

Indeed, there are many other energy-saving items such as double glazing and draught excluders which are not covered by the zero VAT rate. Their take-up would increase were they to be included, which would again be to the benefit of the home owner and the country. I hope the Minister can share his view on this proposal.

I am listening to the noble Lord’s speech with great interest. I understand that there are thousands and thousands of acres of factory roofs in this country. Would it not be a very good idea for them all to be encouraged to have solar panels?

Indeed. The noble Lord is absolutely right. I was going to come on to that point. The UK Warehousing Association says that if we could get solar panels on all its warehouses, we would get 15 gigawatts of energy. The difficulty—perhaps the Minister can comment on this—is that there is difficulty in many cases with connecting to the grid. We need to find ways to help them achieve that for the benefit that the Minister just mentioned. I hope we can hear the Minister’s views on these issues, without him just shrugging them off as he has in the past, saying that this is a matter for the Chancellor.

Just like warehouses, other forms of non-domestic solar are vital; solar farms provide one such example. But we hear from media reports—the Minister can perhaps confirm whether this is true—that the Environment Secretary wishes to prevent new ones being built on the apparent basis that they are a threat to food security. Yet solar farms are a major UK success story that does not require subsidy. The chief executive of the trade association Solar Energy UK told the Financial Times last week that there is more than £20 billion of private capital in the project pipeline—investment, as well as the jobs and extra finance to support farmers it would bring, that would be lost under the Environment Secretary’s apparent plans. Yet there is no serious evidence to suggest that solar farms present a threat to food security. In fact, the opposite is true. Land around and under solar farms can and does support the UK’s nature recovery and biodiversity targets with wildflower meadows, ponds and wetlands. Solar farms drive investment, create jobs and generate clean electricity. I hope we will hear from the Minister that what we hear about the Environment Secretary’s views is incorrect.

As I said at the beginning, we support the main provisions of the Bill, but believe it is a missed opportunity to, for example, set out a clear strategic plan for addressing energy efficiency and expand and make better use of solar energy.

My Lords, I am grateful to the Minister for introducing this Second Reading debate. I begin by saying that I welcome the decision to take action to protect consumers and businesses from sustained high energy prices ahead of this winter. Clearly, something needed to be done, and it is good that we are doing it. The energy price guarantee needs a legal footing, the energy bills support scheme needs to be supported too, and obviously extending measures for non-domestic customers is essential. The measures relating to passing on costs to tenants are welcome, as are those on heat networks and complaints. Then there is decoupling the wholesale gas price from the price we all pay.

Something needed to be done and this Bill is at least an attempt to do it, so its content is necessary and to be supported. However, it is possible to be supportive of the content but dismayed by the means by which these issues are being brought forward. You can be supportive of the what but very concerned about the how.

I wonder how we got here. It is not as if we did not know when winter was going to be or as if the invasion of Ukraine was a piece of news. Why then are we here in October, already facing emergency legislation being rushed through on an accelerated timescale when we had an Energy Bill that we were debating? In fact, we still have one, paused somewhere in the ether. I do not know whether I feel pleased or saddened that many people said at the time that that was not the Energy Bill that the country needed. This is evidence that we were right; the Government have now had to bring through emergency legislation to focus on the here and now and the issues of the greatest importance.

The most important issue is of course affordability; therefore, I am glad that we are now focusing on that. We could be sitting here talking about a hydrogen levy being applied to bills to pay for hydrogen heating, which would have been a catastrophic waste of time, so I am pleased that we are now at least focusing on the real issues at hand. However, this is a difficult Bill to engage with. It is highly complex, lots of the detail is missing, and the powers being taken are extraordinary. Therefore the how leaves me feeling very ill-prepared and concerned that we are not going to do the job that we are expected to do, which is to go through the Bill, in great detail and with great care, to prevent unintended consequences and to ensure that it is fit for purpose. I feel that, as it currently stands, we cannot do that job.

There will be unintended consequences, not least the effect on investor confidence. It is not as if we do not have other problems facing the economy at the moment. Just at a time when we need to provide certainty to markets and give investors confidence to invest in the UK and to help us deliver a transition in our energy system to a cleaner, more affordable and secure one, we are taking legislative powers which will have a chilling effect on any investor reading them. They are so broad-ranging and there are so few checks and balances that anyone considering making an investment decision in the coming weeks will be thinking twice, and I suspect that they will think that for as long as these powers last.

That brings me on to one of the big concerns, which is that the sunset clauses in the Bill are far from adequate. In fact, they really do not exist, because if you analyse some of them, at least one of the measures, the cost-plus revenue recall measure, potentially lasts for five years, and even then, it is on a rolling basis—the Secretary of State can continue to extend that deadline. No justification is given that warrants that length of time or that level of potentiality for it to continue indefinitely. The industry is truly scratching its head—I am sure we have all had the briefings pouring into our inboxes—trying to understand how it can be possible that this seemingly unjustified approach is being rushed through at such pace.

I hope that we will hear from the Minister about the response to the Delegated Powers Committee report, which picks on just two to three of the clauses that it considers to be most problematic. Clearly, if it had had more time, it would have picked up a number of other measures, but it was not given enough time, and we received the report only this morning. It has been quite scathing about certain aspects, including Clause 9 and Schedule 1, which it highlights as bringing in “camouflaged legislation” and “sub-delegated powers” which undermine democracy and will undermine the role of this House if it is allowed to continue. It also highlighted Clause 22, where it has serious concerns about the nature of the powers being taken. We need to hear from the Government their response to those concerns.

The noble Lord, Lord Foster of Bath, mentioned that some things are missing from the Bill. I do not think that we want a huge omnibus Bill to be rushed through, so it is right that we focus on the affordability leg of the challenge we face, but imagine if we had taken the same approach to the upstream sector. Here we are, looking at a Bill that makes a set of big interventions into the market, leaving it open-ended and being expected just to trust the Secretary of State’s judgment on many things. The Bill has sweeping powers—it has been described almost as nationalisation by the back door; that is how big an intervention this is—yet, when we look at what happened up stream, the Bill that was passed to introduce the windfall tax, the excess profits levy, contained a circumscribed set of things. It was very narrow. It did not have any open-ended powers. It also had a huge get-out clause where, if the sector could show that it was reinvesting in the North Sea, up to 85% of that windfall tax would be taken away.

That is how that sector was treated: with precise, time-bound interventions. It was given clear ways in which to encourage it to invest. Compare that to this sector. It is night and day. I do not think that this sector is being treated with anything like the same degree of fairness, which we should expect from legislation. Let us turn this on its head and ask what we could have achieved had we taken these powers and applied them to the upstream sector. Imagine if we had had the ability to go in with some legislative strength and say, “We don’t want you to continue to charge us these inflated prices for the product that we license you to extract”. We are a purchaser of these products from the North Sea. Rather than simply allowing the sector to price-set then try to claw the money back, could we not have done what we are doing here and had a conversation about capping the price for our own domestic consumption? If we had taken broader powers at that time and done things correctly, we might have got a better outcome than simply allowing the sector to set whatever price it feels is necessary and then trying to claw it back through a windfall tax.

As I mentioned during our helpful briefing with the Minister, there is an international dimension to everything we are talking about here. This issue needs to be seen in that context. Obviously, we are reliant on imported energy from our neighbours, particularly Norway. I want these sorts of measures and the approach of treating this issue like the emergency it is to be evident in our diplomatic efforts with the countries that supply us with our energy. Norway is a neighbour. It delivers a huge proportion of our gas—about 60% at the moment, according to the latest statistics. What are the Government doing to have a conversation with Norway about keeping the price at a reasonable level so that it does not flow through to consumers in the way it currently does? There must be a mechanism for doing that. It is not a poor country: Norway’s profits will be excessive during this period and will end up in its sovereign wealth fund, having come from our taxpayers and out of our public spending. There must be an international dimension. I would have liked to see this Bill in that much broader context of the international elements of what we are describing.

To return to the question of equality of treatment of upstream and downstream—other noble Lords will talk to this issue, I am sure—there is a distinct difference in the time of intervention. The measures in the energy profits levy will last only until 2025 but, as we have just discussed, some of the measures in this Bill may last for five years and be extended on an indefinite, rolling basis. That is simply not equivalent. There is also the fact that, in this Bill, we talk about revenues whereas, in the other intervention, we talked about profits. Why is it called revenue in one sector and profit in the other? What is the nature of the difference there?

I have touched on the Delegated Powers Committee. I hope that, by the time we get to Committee, amendments will have been tabled to change some of the negative procedures into affirmative ones. I hope that we will insert more parliamentary scrutiny into some of the powers. We will, I am sure, have to think about requirements to consult, which are absent in large parts of the Bill. Then, perhaps, we could look at further tightening up as we get time to digest some of the briefings we are getting.

My final comments are two additional points. I want to understand how the measures in this Bill interact with other elements of government policy: specifically, capacity market payments. I wonder whether we are continuing to make capacity market payments while at the same time asking for money back. I just do not know. Some of those capacity market payments apply to some of these generators, which are outside the CfD. I am thinking here about the nuclear operators. I want to understand how they interact. There is also the carbon pricing support mechanism that we have on generators. I imagine that it is currently suspended, but I would like clarification on that, because it would be crazy for us to be requiring them to pay and then asking them to pay us back.

Finally, and not to broaden the debate too widely, it strikes me that we are dealing with a commodity-based crisis, with the pricing of commodities causing consumers to feel the pain, and with potentially very serious consequences this winter. It strikes me that when we try to intervene in this market, we must always think about how we can offer support to those most in need in a targeted way, reducing the amount of deadweight support that we give out so that we get it to the people who most need it. That must be done efficiently.

We must also think about who can bear the cost of paying for this. We should not be assuming that it should be on the public purse and that we have these uncosted borrowing and spending implications coming out of the Government, because that damages our reputation, increases the cost of capital, and has a big effect on people’s confidence in us as a country.

Where could we do this recovery? Clearly, we can take it out of the electricity market, which is making excessive profits. We can also take it from the upstream oil and gas suppliers, as we have done with the windfall. However, there is another body of people who make money in this market: those involved in the trading of these commodities. Gas, and particularly oil, are highly traded commodities. There are derivatives upon derivatives that sit on top of every physical therm of gas and every barrel of oil.

I do not have much hope for this idea because of everything that we have seen coming from the current Prime Minister, but the City of London does understand commodity trading. It is home to thousands of traders in these commodities. The energy companies have thousands of traders, all making money in this market. It is a very lucrative aspect of the financial services market. I would love it if a Government could have a conversation about whether we should be levying some kind of tax on that aspect, so that it would deflate the speculative bubble that I am certain is sitting on top of some of these energy prices that we are all paying, and which will have a very damaging effect this winter if we do not do something about it.

With those final words, I reiterate my general support for the contents but my very strong concerns for how these powers are being implemented. I look forward to the rest of the debate.

My Lords, I am pleased to speak on this important and urgent piece of legislation. I declare my interest as deputy chair of the Church Commissioners’ board of governors. We own stocks in energy companies. In the light of today’s developments in the other place, I should perhaps also declare that I regularly eat tofu.

It is clear that the ongoing cost of living crisis and energy insecurity necessitate swift and comprehensive action. It is estimated that this will adversely impact up to 100,000 households in one of my local authorities, Manchester, this winter. A report published in August by the University of York predicted that more than three quarters of UK households—53 million people—will have been pushed into fuel poverty by January next. It is therefore very welcome that the Government are taking action to help the public and businesses survive the coming winter. It is also good to have the clarity set out in the Bill on the energy price guarantee and the energy bill relief scheme.

However, welcoming the Bill does not mean that I, or my colleagues on these Benches when they are here, believe that it is a latter-day Mary Poppins—practically perfect in every way. While we fully recognise the urgency of this legislation, we hope that His Majesty’s Government will take seriously the calls to amend certain of its details before we reach Committee next week.

The energy price guarantee, setting a limit to the amount households can be charged per unit of gas and electricity, is clearly needed as prices continue to rise rapidly. However, it is questionable whether this should include a temporary suspension of green levies. As Energy UK said earlier this year, reducing support for

“the very solutions that will prevent a repeat of the current crisis”

would not be

“the wisest move”.

Now is the moment not only to tackle the current crisis but to double down on the strategies that will reduce, and eventually eliminate, this nation’s need for imported fuel—a need that puts us at the mercy of the international markets.

The energy bill relief scheme’s support of non-domestic customers is also very necessary. The challenge that businesses, schools, hospitals, churches and many others face is huge. Many of my churches are now working on plans to join the Warm Welcome initiative. They will extend their opening hours through the winter to offer a place for local people to cut their fuel costs by spending less time at home. Warm churches, many with free wi-fi and even free hot drinks, have a key role to play—although I confess that I never imagined, until recently, that I would be commending Church of England buildings to your Lordships’ House for their cosy warmth.

But—and here is the issue—extended opening will lead to even heavier fuel bills. Last week we announced £15 million from Church Commissioners’ funds to help keep our churches warm this winter, but that will go only part of the way. We need further clarity from the Government on how the non-domestic scheme will work in practice.

When we legislate in haste, without the usual opportunities for consultation and debate—as I accept we now must—one golden rule should be that we legislate for the minimum period necessary and with the minimum scope for Ministers to build on that legislation without full public and parliamentary scrutiny. In several respects, as earlier speakers have indicated, the Bill in its present form fails that vital test.

It is of concern that the Bill grants the Secretary of State powers to end the tariff cap when they choose, as well as broad powers to amend the energy price guarantee and energy bill relief scheme. The uncertainty surrounding the tariff cap’s duration, as the noble Baroness, Lady Worthington, has just reminded us, will likely make it more challenging to give energy suppliers the certainty they need to purchase gas and electricity in advance for customers. It is concerning that, while the Government intend these measures to be temporary, the Bill assumes they will last for a minimum of five years—longer than however many Home Secretaries and Chancellors from recent times put together.

As drafted, the Bill lacks important definitions. The term “energy crisis” is left very broad and not clarified. Further definition of this term would be greatly beneficial to ensure that such emergency power measures are used at, and only at, the appropriate time. Secondly, the Bill does not include a definition of the policy instrument it seeks to introduce. Clarifying this would surely improve the Bill. Finally, we must also ensure that, in our desire to address the very immediate and acute crisis of paying our energy bills, we are enabling and not thwarting medium-term and long-term responses to the UK’s energy security situation.

To conclude, I am sure that all noble Lords here today recognise the timely nature of these measures and welcome them overall. I urge the Government to look to improve the details of the Bill further. While I am not personally able to be in my place next Monday, my most reverend and right reverend friends on these Benches will consider tabling or supporting amendments in any areas where we feel that His Majesty’s Government have not proposed satisfactory changes to the draft legislation in response to the issues that I have raised today.

My Lords, why are we here today? That is not an existential question but a very practical one. We are here because, without this Bill, households, businesses and institutions —such as the GP surgeries, community centres, libraries and, as the right reverend Prelate just said, churches being lined up as “warm centres” in this fearful winter—would otherwise face unpayable bills.

One direct causal factor here is the actions of President Putin, the instigator of the Russian attack on Ukraine, who just this afternoon announced further sweeping measures of repression on the Ukrainian territory that Russia still occupies and across much of his own nation.

However, the situation is not simple. This is, in the terminology of the planners, a wicked problem. That is not because we had to be in this situation today but because a decade of inaction and wrong action by successive Governments has left us with a fossil fuel-dependent energy system, dreadfully poor-quality housing stock and the great privatisation of homes under the right to buy. My honourable friend in the other place Caroline Lucas has a Private Member’s Bill calling for protection for private renters, a no-fault evictions ban, binding efficiency regulations and a rent freeze to address some of the broader issues for this desperate winter. But many homeowners too will soon be, or are already, in desperate straits, facing soaring mortgage payments. This comes at a time when incomes that were already insecure and inadequate and not keeping up with inflation are leaving people without reserves— 25% of UK households have savings of £2,100 or less.

We are where we are. We have a tottering Government with zero democratic legitimacy and public trust, and no consistency in policy or personnel, and they are offering us this Bill today. That is not to say that I or, I expect, any other noble Lord speaking in this debate will oppose its basic principles. The Government have no choice but to provide major support to households through keeping down the cost of energy to ensure that people do not freeze this winter, and that they will be able to afford a bite of toast, a cup of soup or to fill a hot-water bottle.

However, as our hard-working and fast-working Delegated Powers and Regulatory Reform Committee makes crystal clear, there are a number of powers in this Bill of truly extraordinary scope. We really need a new metaphor. Henry VIII on steroids is no longer adequate; we need instead Henry VIII with rocket boosters strapped to those sturdy legs. I offer that image freely to any cartoonist who wants to run with it.

I am sure that in Committee we will see alternative approaches and will debate the detail, so in the interest of time I am going to take a broad overview of a couple of key points. As a number of noble Lords, particularly the noble Lord, Lord Lennie, have already said, the Bill could create a major bias against renewables and in favour of oil and gas. That is an issue not just for the climate emergency but for future cost considerations for households, as soon as next April. It is effectively a 100% windfall tax on the more established renewable electricity generators, unlike the 25% tax on all gas and oil profits. We could end up in a ridiculous situation where energy producers get a huge tax reduction if they invest to pollute the planet but clean energy does not.

I have a specific question to put to the Minister. It builds on the questions put by the noble Baroness, Lady Worthington. Where do nuclear power stations and biomass firms, such as Drax, sit in this current constellation? The noble Baroness, Lady Worthington, also raised an interesting point about trading in oil and gas. This relates to a question I raised earlier on the economic Statement and the place of the financial sector in influencing our Government’s decision-making. I point the noble Baroness to the fact that, in the past, there have been well-developed proposals for what has been called a Robin Hood tax, or a Tobin tax—a model I prefer. That is something that the Government could well be looking at in this situation to address the points that the noble Baroness raised.

I come to my second key point, which is about community-owned schemes. There is a risk with this Bill that the Government will be subsidising people’s bills with one hand while taking money from their income with the other, when that money could be supporting local community prosperity. Any new regulations created or implemented under Clause 16 must include exemptions for community-owned wind farms, solar farms and hydro schemes that reinvest 100% of their profit back into communities. I note that the Environmental Audit Committee report of 29 April 2021 recognises very clearly the wider benefits from community energy projects. It would be totally counterproductive to take money out of communities while the Government presumably also want to promote social benefit and levelling up. Will the Minister agree to meet community representatives from England, Wales and Scotland to discuss how the implementation and model of the regulations under this clause can be written in a way that does not further handicap the community energy sector that has been left in the lurch over recent years?

I very much agree with the points made by the noble Lord, Lord Foster of Bath, about energy efficiency; it is there in the Long Title. I agree with everything he said about insulation and other energy-efficiency measures. We also need to look at the use of energy in neon lights, neon signs above shops and lighting in shops. Look across the channel—if we are still allowed to do so—where Governments have very quickly brought in a whole range of measures to reduce consumption. Surely we could match or get close to those.

Before coming into the Chamber I was reading Twitter, which your Lordships’ House might judge that I spend quite a bit of time doing. It led me to reflect, as I was assembling this speech, on the views that the public have of Liz Truss, Jeremy Hunt, Jacob Rees-Mogg and an alternative figure who trends as much as any of them, Martin Lewis of the website MoneySavingExpert. I suspect that if you were to offer the powers in this Bill to Mr Lewis, the public might well jump at the idea—indeed, I suspect that many Members of your Lordships’ House might be tempted to do likewise. That really helps to highlight the fact—more evident now than it was half an hour ago—that we have no idea who we could be giving these powers to. That instability is one more reason to say that we simply cannot allow these sweeping, massive powers—which could be deployed capriciously and chaotically, as so much economic decision-making has been in recent weeks—on something as crucial as the energy that will prevent people freezing this winter and ensuring that they can be fed and survive.

My Lords, I put on record that I am not sure I support Martin Lewis for Prime Minister, but anything is possible.

I am sure we all support the need for the Government to act urgently to protect households from the rising costs of energy and to reduce the impact of price rises on the inflation figure. I will not comment on the pig’s ear that the mini-Budget and the subsequent fiscal event have been, other than to express a real, deep sadness at the damage done to our economic credibility and international reputation.

I will focus on three issues in the Bill. I agree with much that the noble Baroness, Lady Worthington, said on two of these issues. The first issue is concern about the nature of the powers the Bill gives to Ministers; the second is concern about the Bill’s impact on energy regulation, the energy market and investment; and the third issue, on the protection offered to off-grid households, has not been raised so far in the debate.

I start with the nature of the powers the Bill gives to Ministers. It must be a pretty rare event to be briefed on the same issues, with the same view, by the Delegated Powers and Regulatory Reform Committee and the energy producers, both fossil fuel and renewable, across Britain. I had not experienced that rather unusual combination of events before.

Although it is completely right that the Government have had to move at pace to design and deliver interventions to protect energy bill payers from even greater price shocks than they are already experiencing, we must not let haste create collateral damage through unintended consequences. The Delegated Powers and Regulatory Reform Committee’s report today is heavily critical—that is probably a mild way of presenting it —of the Bill. It regards the legislative sub-delegation it permits as totally inappropriate. In a previous report it branded such delegation as

“a more egregious erosion of democratic accountability than a simple delegation to a minister to make secondary legislation.”

There is no doubt what the committee thinks about it.

The committee is also critical of Clause 22 and the power to give direction as a Henry VIII power, allowing ministerial direction to modify legislation, including primary legislation. Such direction and modification of legislation would of course not be subject to parliamentary scrutiny. Apart from stressing the need for speed, the Government have so far been unable to explain why the required changes could not be achieved through secondary legislation, subject to parliamentary scrutiny and with the affirmative procedure applying, at least where it is used to modify primary legislation. Perhaps the Minister could respond on that. The Delegated Powers Committee has also asked for a time limit to be placed on the powers of direction, because currently there is none.

Some concerns within the whole range of energy producers fall in line with those of the Delegated Powers Committee. Their fears are that the breadth of powers being awarded to the Secretary of State would enable them to make greater changes to the energy production sectoral rules, without consultation or appeal. The powers being given have no time limit and the definition of an energy crisis, within which the powers are supposed to operate, is so broad that they could reasonably considered to be extensive and permanent.

I am sure the Minister will say that there is a need for speed, and that anything other than nodding through the Bill risks delaying help to the vulnerable people who are most impacted by rising energy prices. However, can he tell the House whether we will hear, before next week’s stages of the Bill, how the Government intend to respond to the two criticisms by the Delegated Powers Committee regarding sub-delegation and direction, which are also relevant to the concerns raised by the generators, both traditional and renewable?

Unlike the noble Lord, Lord Foster of Bath, and despite the Long Title, I do not want to see the remit of the Bill expanded. I would like it to be tightened. The Bill is necessarily having to progress at such a pace that, in the absence of time for proper consultation, it ought to be restricted to the bare minimum of interventions necessary to protect the public for the minimum period of six months, until the next review of the protection measures is due to be put in place, as announced by the Chancellor. Will the Minister agree to review the extent of the Bill and the time limitation of the legislation before we consider its further stages?

The Bill also contains provisions that are unnecessary to achieve the immediate protection of consumers from rising energy prices. For example, the Bill seeks to amend the tariff cap Act, including by removing the sunset clause for the price cap. Can the Minister tell the House why the amendment to the tariff cap Act is necessary for measures which are to be reviewed in three months, and changed in six months?

A further concern on the part of the renewables generators is the cost plus revenue limit, already referred to by the noble Baroness, Lady Worthington. If we have hasty implementation of this limit, focusing on revenue rather than profits, and link that with the Chancellor’s statement that a further extension of the windfall tax is “still on the table”, it absolutely risks shaking the confidence of investors in renewable energy. The Minister did not really respond to the intervention of my noble friend Lord Liddle in respect of the impact on investors. Will he tell the House, when he responds, what assessment has been made of the likely impact on investor confidence as a result of the method of calculating and implementing the CPRL?

My final issue is with the equivalent measures proposed by the Government for people who are off grid—the 1.1 million homes using oil, liquefied petroleum gas and other forms of fuel. I should declare an interest as an off-grid rural home owner, unable to connect to the gas grid. Mine is an older building where there is limited potential for effective energy conservation upgrading, along with a listed building officer who appears not to like heat pumps.

There are 1.1 million homes which are off grid, and they are all in varying circumstances. Many of these off-grid homes are in rural areas and many of the poorest people in rural areas live in them. They are often older buildings with limited potential for energy conservation upgrades, and no cap is proposed for heating oil. The cost of heating oil has gone from 27p per litre in April 2020 to over £1 per litre in April 2022, although it has marginally dropped since then. That is a fourfold increase. The Government have only belatedly offered £100 per annum to oil users to help meet this cost.

The Minister will no doubt say that those off the grid will also benefit from the £400 energy bills support scheme and the £1,200 represented by the cost of living benefits targeted at low-income households. However, the reality is that electricity customers will have over £1,000 of protection through the price cap while oil users and other off-grid homes will get a measly £100. To make matters worse, there is no clarity on when this measly £100 will be paid. People have been buying their winter fuel oil in advance to make sure they have stocks for winter. They have been paying excruciating prices for months, yet all that is on the table is a very small amount, very late in the day, with no clarity as to when.

There are a small number of off-grid users who are not connected to the electricity supply either. How they are going to be reimbursed, as they do not have an electricity contract, is also a question. Can the Minister tell us how the £100 was calculated? How can he assure us that it is fair proportionately for those 1.1 million homes compared with what is being done for those who are on the gas supply? Can he tell us when it will be paid?

Can I also put the Minister on notice? I have recently done that in person. Outside this Bill I was intending to harass him on the further difficulties that off-grid homes are likely to experience as a result of the proposed reforms to the off-grid regulations. These would stop fossil fuel boilers being replaced in off-grid homes from 2026. I hope the Minister is going to be able to assure me at the end of this debate that he is not proceeding with haste towards that while the heat pump market is still in its infancy and not terrifically affordable, efficient or available. I hope he can give me assurances about the off-grid regulations, but I believe that we should tread very carefully in that respect.

If not, should your off-grid oil boiler irretrievably break down the day before Christmas, you could be propelled instantly into a complex, slow, confusing and expensive process of finding a heat pump supplier and installer—they are in pretty short supply—upgrading your insulation and radiators, and funding the upfront costs of the pump and the accompanying energy efficiency upgrades. All of this would be while burning your furniture in the background to keep your granny from freezing to death over the months this would take.

I thank the Minister for our recent conversation about this. Perhaps he can provide clarity to off-grid households on the Government’s response to the off-grid regulations, including when a formal announcement will happen. In the meantime, will he assure the House that this emergency Bill will be stripped down to the minimum measures, both in extent and time, to deliver the basic energy price guarantee to avoid as many unnecessary and inadvertent consequences as possible?

My Lords, I will be extremely brief at this time of the evening, because although the Bill offers a cornucopia of issues that I would wish to speak on—I see the usual faces who participate in these debates and have followed many of the points raised, especially on energy efficiency—I have only two questions to raise.

We obviously support the Bill, and it is going through very quickly, but there has been a complete lack of consultation. One area that has not been covered in discussions is that, at the beginning of the energy crisis, it was energy retailers who were collapsing and causing a number of problems. Indeed, the Government have had to pick up billions of pounds’ worth of contracts from Bulb. My first question is: have the Minister or the department had any consultation with energy retailers? While we can focus on the suppliers and the issues they face, this is an area that will affect people in the way they are billed, especially with these measures.

A particular worry in relation to the Secretary of State—as mentioned, mostly recently, by the noble Baroness, Lady Young of Old Scone—is that regulatory risk is coming down the line. You could almost envisage that the Government will nationalise the retail space; they do not have to go down through the generator space but could nationalise energy retailers. Has this been any part of the discussions? I must declare my interest in another field as the chief executive of a water retail company. We do the same thing in the water sector, but if I were working for an energy retailer at the moment, I would be extremely worried about the way that the department has taken powers away from Ofgem—which would have given the retailers some form of security—and given itself unlimited powers. So my second question for the Minister is: has he considered a sunset clause on the powers they have taken in this Bill, so that when we move, hopefully, towards a more stable form of energy pricing, Ofgem can be given back the powers that the Secretary of State has taken? This would give some degree of certainty to the energy retailers that their business model will not be destroyed.

The retail marketplace was in trouble before the price increases made their business case very difficult—one of the big retailers, npower, left the marketplace. Therefore, can the Minister first say whether there was consultation and, secondly, whether he would consider a sunset clause?

My Lords, I declare my interests as set out in the register. Like the noble Lord, Lord Redesdale, I hope that I can be brief, because many of the points that I wanted to make have been made very eloquently by the noble Baronesses, Lady Worthington and Lady Young of Old Scone, and the noble Lord, Lord Foster. Nevertheless, I endorse and emphasise three particular areas that have been spoken about. The first relates to the length and breadth of powers given to the Executive in the Bill. The noble Baroness, Lady Young of Old Scone, said—although she did not use this phrase—that it was something of an unholy alliance between the Delegated Powers Committee and the energy companies. There is a reason for that: all of us as parliamentarians, whether we are interested in energy or not, ought to be worried about this Bill because it goes against the advice of the Delegated Powers Committee in general about these sorts of clauses, and it does so in fine form. So, on principle, we ought to be concerned about those clauses. We ought also to be concerned about the effect that they have, and the uncertainty that they create, on the stability of markets in the energy sector.

The concerns that the energy companies—Energy UK, RenewableUK, National Grid, and businesses such as E.ON and SSE—have all stated come partly from the proposals that we will come to in a moment. I cannot remember the acronym—I am back to, “If it quacks like a duck, and walks like a duck, it is a windfall tax.” I am mixing my metaphors horribly. But they are also concerned about the effect that the lack of certainty that comes with those ill-defined powers for government will have on their ability to function in future and on their investment plans.

I come to the second point that has been made, which I want to support, about the very real risk in this Bill of disincentivising new low-carbon investment because of the way in which the scheme operates—for reasons that we all understand—for those producers that are not under contracts for difference, and the disparity between costs and prices that has occurred. The uncertainties and unfairnesses of the scheme being put forward will disincentivise new, low-carbon investment. Under the energy profits levy, oil and gas extractors are able to offset new investments against the levy. Under the proposed payments for electricity generators, no such provision is made.

Ministers in the other place simply asserted that this would not happen, when it was raised by members of the governing party there. The industry does not think that this would not happen. We absolutely need to encourage new investment in low-carbon technology, including energy storage and carbon renewals. I declare an interest as someone who has old solar panels. I absolutely agree with the point made by the noble Lord, Lord Foster, about issues such as VAT on batteries being retrofitted on those homes. We need investment, and not simply in onshore wind, although, as the Minister knows, I am very keen on investment in new onshore wind. We need to look at new technologies—at batteries, energy storage and carbon renewals and removals—and get ahead of the game, as we have been on renewable energy, on the technologies that will support that and end the problems of intermittency.

Parity could be achieved to ensure a level playing field between fossil fuel investment and investment in renewables by making amendments so that the payments are determined not just by reference to the quantity of the electricity generated but by the new investments made by the firm over the same period. I know that the Minister hopes that this problem could be solved by everyone going over to the contracts for difference and that it would be a power to keep in reserve, but that is not clear in the Bill. The Bill gives very wide-ranging and long-standing powers to the Secretary of State to change this. The oil and gas levy has a sunset clause of December 2023 so, if it is a reserve power, perhaps the Government could clarify a timeframe for the scheme and use the contracts for difference scheme and a shorter sunset clause.

Finally, I reiterate some of the points that the noble Lord, Lord Foster, made on energy efficiency. The Chancellor said that, when he looked at what would come after six months of the current subsidy support scheme, he would look at targeting it on those who need it most and at energy efficiency. I hope that he will do that, and urgently. We need a clear national strategy for energy efficiency that encompasses raising the energy efficiency of existing homes and how they will move to low-carbon heat, supported by a skills pipeline and a single source of advice, with interim targets and secure funding. Setting a clear pathway by the Government showing leadership would not only help to reduce energy demand but reduce bills for customers—and the taxpayer—now, as well as contributing to achieving our net-zero targets.

As the noble Lord, Lord Foster, said, the Government agreed last night to consult on a plan for achieving this for our 1.4 million social housing properties that are below EPC band C. The House felt strongly enough to make the Government put that commitment in the Social Housing (Regulation) Bill. I hope that the Government will consider setting out corresponding plans for the private rented sector and for owner-occupiers.

My Lords, I welcome the opportunity to add a Northern Ireland perspective to our proceedings on this critically important legislation.

The cost of living crisis continues to bite, with it being confirmed this morning that inflation has returned to a 40-year high. It is set to be a worryingly difficult winter with individuals and families having to choose whether to skip meals or heat their homes. This is a tragic state of affairs in the year 2022. I therefore support the Bill, but I have a number of concerns that I hope the Minister will endeavour to address in his wind-up remarks.

As the noble Lord, Lord Callanan, indicated, there can be no doubt that much of the blame for the current crisis is in the bloody hands of Vladimir Putin, which are choking off energy supplies across Europe and beyond. As the noble Baroness, Lady Bennett of Manor Castle, mentioned, noble Lords will be aware that the situation has become even more grave in recent hours after Mr Putin imposed martial law in the four annexed regions of Ukraine. This is an attempt to turn Ukrainians against each other on the battlefield and place even greater strain on global energy supplies. The sooner he is removed, the better for all of us —including the Russian population.

However, we are where we are, and the UK Government are correct to step forward—as other Governments are doing across Europe—to take the action they are proposing through the legislation before us. However, not for the first time, Northern Ireland finds itself in a peculiar position in comparison with the rest of the United Kingdom. As not all your Lordships may be aware, 68% of Northern Ireland households use home heating oil. That amounts to half a million homes, mostly in rural areas. This compares with around 3% of households in England.

The price of oil in Northern Ireland has rocketed. Figures released by the Consumer Council last week show that the average cost of 900 litres of home heating oil in Northern Ireland has risen to £923.34, up by more than 51% from £472.27 12 months ago. Further, the price has gone up by £50, from £873.31, in just seven days. The noble Baroness, Lady Young of Old Scone, alluded to the £100 support for heating oil. This is particularly relevant to the debate we are having today because, as it stands, the Government are promising to support home heating oil customers in Northern Ireland with a mere £100 payment in the form of a credit to electricity bills—half of this has now been wiped out in the space of a week. This is simply untenable.

At current prices, £100 would pay for a meagre 80 litres of oil, which will not last long and is too small an amount for many suppliers to agree to deliver in the first place. Further, no mechanism is yet in place to even get this money to Northern Ireland consumers, given the absence of an Executive at Stormont. I appeal to the Minister, who we all know is a fair and decent man, to use his good offices to make the case for a rapid rethink on this aspect of the Government’s plans, because the people of Northern Ireland are struggling more now than at any point over the past 25 years.

I am also concerned that the support the Government is offering, both to households and to businesses, will last for only six months. I am well aware that a review with new arrangements is due to be in place by April, but I fear these will be even less generous than those intended to carry the country through the winter, and as I have sought to make clear, in relation to Northern Ireland, they are not generous at all. This is causing great concern for many of my fellow citizens in Ulster. I appreciate that the new review will, of necessity, take a certain period of time, but I appeal to the Minister to urge his colleagues to come to some sort of decision, which must be subject to proper scrutiny by your Lordships and the other place, as a matter of utmost urgency.

This is not the time to dwell upon the arguments for why the ill-advised Northern Ireland protocol is doing so much damage to everyday life in the Province, with businesses facing increased costs and consumers having to cope with a reduced choice of goods and higher prices due to fewer suppliers. However, we do need the sea border to be removed and Northern Ireland’s position as an equal part of the United Kingdom to be fully restored. Yesterday, the Secretary of State for Northern Ireland, Chris Heaton-Harris, made clear that he intends to trigger a new set of elections to Stormont to try to break the logjam if the DUP continues to refuse to take its seats in the Executive. I see little good or little change coming from this proposed election, although my party, the Ulster Unionist Party, will, as always, fight these elections vigorously should they be called.

I urge the Government and the European Union to work together to properly address the problems the protocol is causing. Equally, I ask the Minister and his colleagues, including the Prime Minister herself, to take a more active, personal interest in Northern Ireland and its people. There is a lack of political direction in the United Kingdom at the moment, we all know that, and nowhere more so than in Northern Ireland, which has been without a functioning Government for most of the year. This would not be accepted elsewhere in these islands, and leadership is urgently required in the Province as the cost of living crisis tightens its vicious grip.

After all that, I support the Bill and look forward to the Minister’s thoughts.

This Bill comes very late in the present predicament. A poor track record of government action and wrong priorities has brought about a vulnerability to energy shocks, going back to the short-sightedness of the Cameron Government in curtailing wind and solar renewables in 2015.

I welcome the comprehensive nature of the Bill, providing support across domestic users, businesses and charities—all types of users and circumstance facing unprecedented price challenges—but, in doing so, the Bill gives vast new powers to the Secretary of State to intervene in the market. While this is emergency legislation, it is regrettable that your Lordships’ Secondary Legislation Scrutiny Committee has yet to be able to report, while the Delegated Powers Committee could concentrate on only three significant delegations of power, which seem to have been ignored from earlier reports on the delegation of functions.

That there are sunset clauses, to which other speakers have drawn attention, is less than comforting; it highlights the seriousness of the review the Government must undertake and be accountable on before introducing the next stage of measures to follow in April 2023.

As I am in the gap, I will limit my remarks to one or two issues also highlighted throughout the debate. I thank the Minister for the meeting he conducted yesterday on the Bill. In his reply, can he say something about the Government’s outlook regarding the continuation of the tariff cap legislation, pending the sunset of the tariff cap Act of 2018? The Energy Bill has now been paused for the passage of this Bill. In so far as this Bill picks up these provisions, the calls for reform of many of the tariff cap provisions and the operation of Ofgem have become issues of concern. Can the Minister outline how the emergency nature of the present situation will give way to more orderly regulation of the market? At the moment, there is no competition and no switching between suppliers as energy contracts expire, as quotes from new suppliers have ceased.

The second feature I will highlight is the discrepancy in treatment between sources of power. The upstream measures for oil and gas companies that allow the off-setting of the energy profits levy for investment are in contrast to downstream measures on renewables and their surrogate levy—reinvestment there is vital and necessary, but they have not been given equal treatment. This gives a perverse incentive to continue with fossil fuels and carbon-emitting sources of energy.

As the Bill gives powers to the Secretary of State to vary contracts retrospectively on both earlier contracts under the renewables obligation and later contracts varying the contracts for difference into cost-plus, can the Minister explain why the Government have not introduced clauses giving incentives on an even-handed basis? Why do they not review the MER—maximising economic recovery—provisions? They should prioritise the development of renewables, which is where growth will come from for the long-term future of the UK.

The supply chain of renewables and energy-efficiency measures, also vital under ECO4, cannot simply be turned on again after the way it was treated—being shut off during previous government interventions. The climate emergency and net-zero imperatives remain the long-term energy challenge.

My Lords, I once again declare my interest in the energy storage industry. What a Bill—it seems we are all agreed on what we are trying to do, but none of us agrees on how we are going to do it. Yet we have this very short timetable to complete the Bill, effectively now on Tuesday, although it was going to be Monday.

We have had a big break since the Energy Bill, which has somehow disappeared before it got to my best amendments, so I am extremely disappointed personally that it has been postponed. However, I spent my time well over our various recesses with my chainsaw, sawing up all my homegrown logs—they are three years old, so low-particulate. I spent a lot of time on that and am pleased to say that the Teverson household has not yet turned on our central heating. I hope to get beyond that critical date of 22 October when everyone switches it on.

It is interesting that, apart from the Minister, we have not had a contribution from the Conservative Benches tonight, although they have a past Energy Minister on their Benches, the noble Lord, Lord Marland, whom I enjoyed working with during the coalition Government.

A number of themes have come out clearly this evening. The most powerful, from the Delegated Powers Committee, is the huge range that the Government and the Secretary of State have been given here. Clause 22 was mentioned, but I particularly looked at Clause 13(2), which says:

“The Secretary of State may take such other steps as the Secretary of State considers appropriate in response to the energy crisis.”

I was thinking about what that could include. The most obvious step, given one of the main sources of energy price increases, would be to declare war on the country that is causing us this problem. That power seems to be in the Bill. I assume, despite the chaos of the Government at the moment, that will not take place. It illustrates the huge powers that are in the Bill.

I refer specifically to amending licences. I do not think this has been mentioned in the debate although many noble Lords have mentioned powers more generally. I would be interested to understand from the Minister why that particular power is in the Bill because, despite all the advice we have from energy companies, this is the one that seems to move away from the neutral, reliable, regulatory system that we have and seems to breach it. I would be interested to understand why that is included.

We heard also from many Members of the House—the noble Baroness, Lady Hayman, for instance—about the discrimination that there seems to be between renewables and the fossil fuel industry, both in terms of the way they are treated and whether the cost-plus revenue limit is a tax. It is obvious that it is really, but it does not have the ability to bring back money for investment in the industry. There is a difference in those schemes, with the fossil fuel scheme lasting until 2025, I think, and the powers in terms of the renewable sector until 2027. Why is that there? It is inconsistent and goes against government policy, or certainly declared government policy, and perhaps the Minister could explain that further.

We have little information about the cost-plus revenue limit itself. There are great powers for Ministers again. There has been very little consultation. I understand the consultation is still to happen. Perhaps the Minister could tell us what the timetable will be on that: will it be microseconds, hours, or maybe even reach to days? It would be useful to understand something that is so important.

I was pleased to hear from the noble Lord, Lord Rogan, about the £100 payment because I was not aware of the situation in Northern Ireland. I am not on a gas system myself, but in England most people are. It was a very interesting point. I do not fully understand the £100. We all know that if you put a round number in a bill, it is a made up number—that is where round numbers come from. If you have any sense, you put it at £98.20 or £102.50, to convince us that there is some science behind how that amount was reached. I would be interested to understand where that comes from. I think it really does discriminate against a lot of rural Britain that is not able to plug into the gas network, as many people say.

I am a great supporter of contracts for difference. They have been a saviour in many ways. They were introduced during the coalition Government, they are well supported by the present Government, and they seem to offer fantastic balance between fairness in terms of cost and certainty in terms of investment. They have worked well. I like the idea of trying to transition many other power producers on to CfDs. We have here a voluntary mechanism to be able to do it. I understand that one of the selling points the Government are giving this is that it takes out risks or gives certainty, but I still find it difficult to understand why organisations or companies would make that transition. I would be interested to hear more from the Government about why that should be the case.

I will finish by saying that the one thing that strikes me most about the Bill, and this whole philosophy, is that there is not an exit strategy. There is no way out of this. The only way out is if, perchance, energy prices themselves come down in the future. There are all sorts of reasons, I hope globally, why that might be the case, but we have no assurance of it. It seems to me that the fundamental obscenity of this situation is that we are likely as taxpayers to pay altogether on the two schemes—what is in this Bill and what has come before—up to something like £137 billion in current expenditure on keeping bills down, yet our energy infrastructure in this country in terms of housing, as the noble Lord, Lord Foster, said, will be as weak and pathetic as it is now after we have spent that money. How much better it would have been if we had previously invested that money to reduce demand, yet we failed to do that. Once we get through this winter cycle, or maybe the one after, or the one after that, we will still have the same inefficient energy structure in this country that we had before. To me, that is the greatest challenge.

The Bill is needed, but the way it is implemented is far from perfect.

My Lords, I thank all noble Lords who have participated in this Second Reading; there have been thoughtful and detailed interventions across the House. These Benches welcome the Bill and will support its passage. However, as raised by my noble friend Lord Lennie in his opening remarks, there are a number of issues we would like to see revised, revisited and resolved. I think the deadline for amendments is tomorrow evening, and we will be working with colleagues across the House to bring forward some detailed amendments which will improve the Bill, as your Lordships’ House always does. I will not repeat my noble friend Lord Lennie’s concerns about the Government’s wider conduct around bringing it here, but I repeat the concerns he and others have with the Bill itself. While it is welcome, it is certainly not perfect, and we truly believe it can be improved in a number of ways.

Families and businesses alike are feeling the hardest pressure as we enter the winter, and the Bill and the measures within it are therefore welcome. Reflecting on the measures themselves, there are a number of deficiencies when compared with the package that the Labour Front Bench in the other House initially proposed—a package, I note, that the Government get closer to day by day. Why not save us all a little bit of time and move to that now?

First, capping the unit price means that prices will still rise by £129, even when taking into account the £400 of support, and many households will pay a lot more than the typical £2,500 figure that the Government keep repeating. Ultimately, 10 million families will spend more than 10% of their income on energy.

Secondly, as we have heard from across the House, the one in six households that use off-grid energy sources for their heating will get little or no support, in stark contrast to the average £1,000 of support they would have got from Labour’s plan. The 4 million households with prepayment meters get no additional support, even though they use 60% of their energy over this period. These families will be spending these long, cold months unsure whether they will be able to keep their homes warm on a day-to-day basis.

Then there is how it will be paid for. Once again, I will not repeat too much of the contributions from my noble friend Lord Lennie and others, but it is clearly bizarre to avoid calling it a “windfall tax” for political reasons. I am not sure it matters what you call it—targeted interventions, periodic payments, an excess profits levy—because it sounds like a windfall tax and it acts like one.

More importantly, not prioritising cheap, homegrown, low-carbon power in favour of expensive, insecure fossil fuels is just not sensible, as we have heard. Onshore wind and solar are being treated as the whipping boy of the industry, shouldering an unfair proportion of the costs while other renewables are protected.

The Government have set out no detail on how the level of the cap will be decided, massively denting investor confidence. There needs to be clarity that the UK will not set a cap which puts us at a disadvantage against the EU equivalent and certainly not higher than the equivalent measures in the oil and gas sector. The windfall tax must be set at a level to contribute significantly to the price support for businesses and consumers—an eye-watering amount, as we heard from the noble Lord, Lord Teverson. The Government must end the absurd multibillion-pound loophole for oil and gas companies on reinvesting. Above all, it needs to be fair to consumers.

There is a vast range of powers contained in the Bill. The Delegated Powers and Regulatory Reform Committee, or DPRRC, has understandably not had enough time to look at all the powers in the Bill in detail, but it is disappointed by the decision to provide in Clauses 9, 11 and 22 powers that it finds inappropriate. Inappropriate: it does not come much clearer than that.

It said that the power in Clause 22 allowing the Secretary of State to give a direction to any energy licence holder or the Northern Ireland regulator needs to be fully explained, as the noble Lord, Lord Rogan, asked. Ministerial decisions need to be subject to parliamentary scrutiny and should be sunsetted commensurate with the other time limits in the Bill—five years is just too long.

The Minister said in his opening speech that the concerns expressed in the DPRRC report needed to be balanced with the needs of consumers benefiting from this Bill. He is right, but we on these Benches believe that there is a way through this that does not have a contradiction. We will bring forward amendments tomorrow which we will discuss on Monday in Committee and on Report.

The Minister will have received representations from industry. Many of its issues have been raised this afternoon. The noble Baroness, Lady Worthington, and others touched on them, but I will quote one:

“Our concerns are not linked to the substance of the policies outlined within the Bill but to the unprecedented and open-ended powers the Bill would confer upon the current and future BEIS Secretary of State without sufficient recourse to Parliament.”

With the changing political winds, you may ask why we on these Benches do not just keep quiet and let this go through. The reason is simple: we believe in parliamentary scrutiny and the benefits it brings to legislation and departmental and ministerial decisions. As the noble Baroness, Lady Worthington, the right reverend Prelate the Bishop of Manchester, my noble friends Lady Young of Old Scone and Lord Liddle, and others have asked, will the Government look again at these clauses?

Similar to the emergency legislation passed during Covid, this legislation gives the Secretary of State powers to extend provision on a rolling basis every six months at a time when investment in our own homegrown energy generation has never been more crucial to UK energy security. The unintended consequences of this Bill for investment could be far and wide-ranging.

We will of course look at all of these issues in more detail in the remaining stages on Monday, so I will finish off by briefly saying that the most important thing to come out of the Bill is not what is contained within it or the issues with those measures but the lack of a long-term plan that it signifies. The Bill’s solution to the problem of some renewable and nuclear electricity generators making windfall profits because of the way they price their electricity, where it was contracted under the renewable obligation arrangement and pegged towards expensive gas, is a short-term fix. There is no long-term solution in the Bill; or, as the noble Lord, Lord Teverson, said, there is no exit strategy. We would include powers to solve this problem in the long term by delinking the price of low-carbon power from that of gas for good. Unless the Government dramatically change course on their fundamental approach, we could face similar crises in the years ahead.

What we need is a sprint towards green energy—towards solar, wind, hydrogen and nuclear—and, as the noble Lord, Lord Foster, said, energy efficiency. I know that the Minister often talks about an energy mix, and again, he is right, but it is about prioritising those sources over oil and gas. Not pushing forward with these over the last 12 years has significantly raised bills and imports, and undermined our own energy security, contributing to the crisis we are facing today. We cannot let this be repeated. It is time for change.

I thank all noble Lords for their contributions to this important debate today. I will respond to as many as possible of the issues that were raised in the time that is available to me.

I start by briefly reminding noble Lords of the importance of the Bill. Russia’s illegal war in Ukraine has led to a global energy crisis, and the Government are taking urgent action now to support households and businesses across the UK which would otherwise face significant financial difficulties this winter. I know that many speakers in the debate recognised that. This legislation will ensure that households, businesses and other bodies such as charities and public organisations—and indeed churches—receive the financial support that they need by providing the framework to deliver the Government’s energy support package. In so doing, the Bill will help drive down inflation and support economic growth.

I turn to points raised by noble Lords in their contributions. First, I thank the noble Lord, Lord Lennie, and the noble Baroness, Lady Blake, for their letter that I received this morning on the Energy Security Bill. I will respond to them in writing shortly, but I assure the House that the government remain committed to the important measures in that Bill to deliver change in the energy system over the longer term. We have to deal with the short-term crisis but we are not forgetting the longer-term context, and many of the measures in that Bill are to ensure that changes are made in the regulations that will benefit us all in the long term.

In the meantime, we are facing a global energy crisis, and we must ensure that we prioritise delivering the measures in this Bill to provide that much-needed support to consumers. I will say a few words about why it is so important to get this legislation passed soon. I thank the noble Baroness, Lady Worthington, and the right reverend Prelate the Bishop of Manchester for raising the important issue of the speed of this legislation; I readily accept that we are going through it extremely rapidly.

Households and businesses face rising energy prices, and it is essential that this legislation and subsequent secondary legislation that will be laid under it is in place by the end of this month. This is to allow for urgent financial assistance for householders, businesses and other organisations across the UK ahead of the winter, and particularly from the start of November.

Building on the DPRRC’s report, the noble Lords, Lord Lennie, Lord Teverson, Lord Foster and Lord Grantchester, and the noble Baronesses, Lady Worthington and Lady Young, raised concerns about the delegated powers in the Bill. Again, I pay tribute to the work of the DPRRC and thank the committee for its report, which I will also respond to shortly. The Bill takes a relatively limited number of powers but I readily accept that they are broad ones. They are essential for ensuring that these crucial support schemes can be stood up at pace. The House will appreciate the speed at which this measure has been drafted. I pay tribute to the exemplary work of the officials involved in delivering it; it has involved lots of late nights and weekend working for them, for which I thank them. It is essential that these measures are delivered as intended. To be frank with noble Lords, these powers will allow us to do this with the appropriate scrutiny.

As I said in my introduction, the vast majority of the powers in the Bill are effectively time-limited through either direct sunsetting—normally, noble Lords are calling on me to sunset powers—their link to other powers in the Bill, or indeed the duration of this energy crisis. The ability to extend time limits ensures that we have sufficient scope if we need to change them over time. I assure the House that noble Lords will of course have an opportunity for further scrutiny on the details of those schemes via the secondary legislation route, much of which is subject to the affirmative procedure.

A number of noble Lords raised concerns about the powers in Clauses 21 and 22, specifically powers to modify licences and give direction; those concerns were also reflected in the DPRRC’s report. In my view, these powers are necessary to facilitate the delivery of a number of support schemes, including the Northern Ireland energy bills support scheme and the alternative fuel payment for domestic and, potentially, non-domestic customers as well. Let me make it clear to the House that, under the terms of the Bill, Clauses 21 and 22 must be used in response to the current energy crisis. Using the powers in either clause in relation to action under any of the other powers in the Bill is in effect time- limited, as these powers are themselves time-limited.

As expected, and as always happens in these debates, many noble Lords raised the important issue of energy efficiency. A crisis gives even greater urgency for action to make homes more energy efficient in order to reduce energy bills and, crucially, to tackle fuel poverty. That is why the Government are investing £12 billion in our Help to Heat scheme, including £1.5 billion to upgrade around 130,000 social housing and low-income properties in England. I was able to launch an additional £800 million of that scheme in discussions with housing associations and local authorities only last week.

The Government have also announced further support on energy efficiency through the ECO Plus measures. This scheme was announced in the mini-Budget—it is one of the few measures from the mini-Budget to have survived so far. It will help hundreds of thousands of households to reduce their energy bills by targeting that support to the most vulnerable. Of course, as it is an obligation, we will consult on the detailed policy design of ECO Plus shortly; I am sure that noble Lords who take an interest in these matters will want to contribute. We hope to have the scheme up and running by April next year.

In addition, our energy security strategy sets out further commitments to support property owners, including facilitating low-cost finance from retail lenders to help consumers upgrade their properties at low cost. This includes zero-rating VAT on the installation of insulation and low-carbon heating for the next five years. That will potentially save up to £2,000 on the cost of an air source heat pump—should the noble Baroness, Lady Young of Old Scone, want to move in that direction.

The noble Lord, Lord Lennie, and the noble Baroness, Lady Young, raised the cost-plus revenue limit. The Government recognise the importance of dispatchable and baseload generation for security of supply. The low-carbon technologies that can deliver these types of power, such as biomass and nuclear, tend to have higher input costs. This is being considered as part of the detailed policy design for the cost-plus revenue limit. We intend the limit to last only for as long as it is strictly necessary. A number of noble Lords referred to the five-year sunset provision. That would allow the Government to respond to the immediate effects of high wholesale prices on consumers while ensuring their ongoing protection if gas prices remain abnormally high for a prolonged period beyond current expectations.

Can the Minister clarify that renewables on the cost-plus, whether hydro, solar, wind, AD or whatever, will be assessed separately within those different sectors, rather than it being an across-the-board average?

That goes back to the point I made in my introduction. There are many different circumstances facing different providers. Some of them have pointed out quite loudly that they have sold their power in long-term contracts, et cetera, so it varies from provider to provider. However, the noble Lord gives me the opportunity to say that the precise mechanics of the temporary cost-plus revenue limit will of course be subject to a full consultation, which we will launch shortly.

The noble Baroness, Lady Worthington, raised important issues on who should bear the cost of the measures. The energy profits levy on oil and gas and the cost-plus revenue limit that have been announced for low-carbon generators will help to fund these schemes. The scale of the crisis means that the sums involved are beyond those two mechanisms so higher borrowing will be necessary to pay for this temporary support, and it is right that we use all the available tools to support businesses through this crisis and to spread the costs over time.

The right reverend Prelate the Bishop of Manchester, the noble Baroness, Lady Young—

I am sorry to interrupt when the Minister is trying to finish, but on a point of clarification, with the profits levy, up to 85% of that tax can be defrayed by the Government investing in North Sea oil and gas, keeping us hooked on a volatile and unpredictable source of fossil fuels, whereas this cost-plus recovery has no provision for generators to invest in cleaner power. Why is there not equal treatment?

There are separate provisions allowing generators to invest in clean power. The aforementioned contracts for difference scheme is doing exactly that, providing the incentive for them to invest in clean power. We have increased the number of CfD rounds that we have launched. As the noble Lord, Lord Teverson, said, this has proved to be an immensely successful scheme. I pay tribute to the officials who designed it. It has been so successful that most of the rest of Europe is proposing to adopt a very similar scheme for their own wind generation. It is precisely because that mechanism exists and provides guaranteed revenue for their investments that those incentives that the noble Baroness refers to already exist.

The right reverend Prelate the Bishop of Manchester, the noble Baroness, Lady Young, and the noble Lord, Lord Grantchester, all raised important points regarding the default tariff cap. The energy price guarantee will now determine the prices that households pay for their energy. However, we are retaining the price cap to help deliver this energy price guarantee. Clause 20 will ensure that Ofgem continues to calculate the cap level to determine what it costs an efficient energy supplier to provide a household with gas and/or electricity. Of course, this will not determine the prices that householders pay, but it will enable the Government to identify what level of support is needed to deliver the prices in this energy price guarantee. The price cap is a mechanism that has been proven to prevent excessive charging and to reflect the real costs of supplying energy. Retaining it will ensure that suppliers price in line with the energy price guarantee and that public funds are used efficiently.

The noble Lord, Lord Foster, gave his view that the Bill treats renewables less favourably than oil and gas. No energy firms, however they produce, should be profiting unduly from Russia’s war in Ukraine, whether they generate low-carbon or fossil-fuel energy. Current price levels in electricity markets are far higher than any energy firm could possibly have envisaged or forecast, or would have predicted they would need, to continue investing in renewables.

Low-carbon electricity generation from renewables and nuclear will be key to securing more low-cost homegrown energy, which is why we continue to support investments in the sector. I remind noble Lords of the point I have made continuously: the schemes have been extremely successful. We have the highest proportion of offshore wind energy in Europe, by far. We have the second-highest proportion in the world, and we have extremely ambitious plans to continue investing and producing more of it, precisely because the scheme has proven so successful and is delivering much cheaper power. It is our flagship scheme and it has worked a treat, as I said—so successfully that other countries are now adopting it. In 2023, the scheme will move to annual auctions, helping to further accelerate the deployment of clean low-cost generation, which is something that I know all contributors will welcome.

The energy price guarantee and the energy bill relief scheme support millions of householders and businesses with rising energy costs. The Chancellor made clear that they will continue to do so from now until next April. Looking beyond that, I am sure noble Lords would be interested to know that the Prime Minister and Chancellor have agreed that it would be irresponsible for the Government to continue exposing the public finances to unlimited volatility of international gas prices. Therefore, it is the Government’s intention that, after this winter, support is better focused on the most vulnerable households and those least able to pay, with greater incentives to improve energy efficiency.

The noble Lord, Lord Foster, raised issues on the essential importance of encouraging solar energy use in households. I completely agree with the noble Lord. We are committed to solar power, which not only is good for the environment but at the moment represents the cheapest way to generate electricity in the UK, albeit intermittently. The British Energy Security Strategy sets out an expectation of 70 gigawatts installed solar capacity in the UK by 2035. To achieve that and meet this increased ambition, we will need a significant increase in both ground-mounted and rooftop solar in the 2020s and beyond. The noble Lord will be pleased to know that there is a healthy pipeline of ground-mounted projects, currently amounting to around 19 gigawatts across Great Britain, which either are in scoping or have already submitted planning applications.

The noble Baroness, Lady Worthington, asked me yesterday and again today about our negotiations with Norway.

I apologise; I thought the Minister was going to continue points about solar. Before he finishes, could he respond to the question I asked on the Environment Secretary’s plans to stop further solar farms? Could he update us on that situation?

I have referred to the pipeline of solar for which planning permission has already been granted or that is in scope. I think the noble Lord can see that there is a considerable pipeline of solar plants that are already coming on stream and that our target remains in place.

Would the Minister give way on that point? I hope we can depend on him to make the point to the Secretary of State for the Environment that, if he had a proper land use strategy, he would not have a conflict between wind farms, solar farms and agricultural land. We would have a proper planned process to use our land wisely.

I thank the noble Baroness for that point. It is now on the record, and I will ensure that it is drawn to the attention of the Secretary of State for the Environment. In answer to the point made by the noble Baroness, Lady Worthington, about our negotiations with Norway, following the successful vaccine task force, we have created a new energy supply task force under the leadership of the excellent lady Maddie McTernan. She had such success with vaccines that we have now given her an even tougher challenge to solve. She and her team are already negotiating new long-term energy contracts with domestic and international gas suppliers to bring down the cost of the intervention immediately. The Government are opening negotiations with domestic and international gas suppliers on the prospects of longer term, lower cost gas contracts.

The right reverend Prelate the Bishop of Manchester was wrong to question whether the Bill should include suspension of green levies. In fact, we have not suspended the green levies in Great Britain; £150 of the savings will be delivered by temporarily suspending environmental and social costs being passed on to consumers. They were levied on bills, but they will now be directly funded by the Exchequer under the energy price guarantee. The Whip is telling me that I am running out of time, so apologies if I do not manage to get all the remaining points in. Those costs will be transferred to the Exchequer, so they are not borne by consumers, but they are present and still funded to help us benefit from low-carbon electricity generation.

The noble Baroness, Lady Bennett, asked about community-owned energy schemes, and we recognise the role community and locally owned renewable energy schemes can and do play in supporting the UK’s national net zero targets. These projects help encourage innovation and investment as well as community engagement with the energy challenge.

The noble Baroness, Lady Young, asked about the £100 alternative fuel payment, as did the noble Lord, Lord Rogan. This is designed by reference to past increases in the cost of heating oil in the year to October 2022. We will be monitoring the price of heating oil and other alternative fuels closely in the months ahead to see whether further payments are required at a future point in time. The noble Baroness also asked about the off-grid gas consultation. As I said to her in our conversation, we consulted last year on plans to phase out the use of fossil fuel heating on the gas grid. We have not made any decisions yet on how to move forward. The noble Baroness will be the first to know when those decisions are made and announced.

If the House will permit me just a little bit of time to say something on the important subject of Northern Ireland, I would like to touch on our equivalent support for Northern Ireland, in response to the noble Lord, Lord Rogan. In the absence of an Executive, the UK Government are taking steps to ensure that households and businesses across the whole of the UK are able to access support to manage their energy bills. In doing so we are ensuring that households and non-domestic consumers in Northern Ireland receive an equivalent level of support to those in Great Britain. I am sure that will reassure the noble Lord.

To conclude, I am encouraged by the support for the Bill, and I thank, in particular, noble Lords in the Opposition for that. I realise, of course, that on all the various subjects noble Lords have many other points that they wish to make and to put forward, but I think there is general support across the House for the Bill. As always, I look forward to continuing constructive engagement as the Bill progresses through your Lordships’ House.

Bill read a second time and committed to a Committee of the Whole House.

Statement of Changes in Immigration Rules

Motion to Regret

Moved by

That this House regrets that the Statement of Changes in Immigration Rules (HC17), published on 11 May, implements plans to differentiate between refugees depending on how they entered the United Kingdom, does not provide for safe routes, and was not accompanied by an impact assessment on the effect of the changes. 2nd Report from the Secondary Legislation Scrutiny Committee

My Lords, this debate should really start with a health warning. I say that not because of the time of day but because the official list of changes in the Immigration Rules since 1994 covers more than one large page of closely typed A4. There have been some four to seven changes every year since then. The good news is that the Secretary of State will review the changes made since 2017, produce a report and publish it. We may get some insights into the various zig-zags of policies over the years.

I turn now to the statement of changes of 11 May, referred to in my Motion. The statement implements Section 12 of the principal Act. I regret that it is equally discriminatory, giving successful asylum applicants different rights depending on how they arrived here. Group 1 will be a very small group who arrived here direct from the country they fled or who entered under another visa and then applied for protection—for example, following a change of regime. Group 2 applies to successful asylum applicants who arrived via other countries. They will be the great majority of recognised refugees in future.

Group 1 will get status and leave to stay for five years, after which they can apply to remain permanently. They can sponsor a partner and any children under 18. By contrast, group 2 will gain status and leave to stay for 18 months only. In the last of those 18 months they may apply for an extension, but they will have no automatic right to settlement here. Reunion will be possible only for a spouse or child who cannot safely live elsewhere. Your Lordships will see that there is a huge difference in the treatment of the two groups, although both will have been accepted as bona fide refugees.

The British Red Cross, which I thank for its information, points out that refugees should have support based on their need for protection, not their method of arrival. Short periods of leave to enter will harm integration, making it difficult to learn new skills and gain employment. The Home Office will have to decide on applications to extend the leave to remain. This resource could be better used in reducing the backlog and giving better and quicker first decisions. I note that on 30 June the backlog was more than 99,000 cases.

The restrictions on family sponsorships will harm women and children by removing, for many, an existing safe method of arriving. This in turn may lead to more dependants attempting dangerous journeys to reach their next of kin. Lasting family separation and uncertainty will make it harder for recognised refugees to integrate.

The new regulations on family reunion may be slightly clearer than the old ones. There can be little doubt that they are more restrictive, but the complexities are such that free legal aid would be extremely helpful. At present it is not available. Therefore, much will depend on guidance that we have yet to see and on training for caseworkers and sympathetic implementation.

I come now to the special case of El Salvador, from which in 2017 there were only 38 asylum applications. Then, because of that Government’s harsh repression, the figures rose by stages to reach 658 in the first six months of 2022. Over the last two years, more than half of these applicants received refugee status or humanitarian protection. Why has this safe and legal route now been closed?

The May regulations had no impact assessment. I therefore ask: will one be published, in particular on group 2 refugees? Shorter periods of leave, no automatic route to settlement and restrictions on family reunion are the most important points to be considered.

The success of the two schemes for Ukrainians shows what can be done when there is good will and good co-operation all round. Over 133,000 entry clearance visas were granted for Ukrainians in the year ending last June. I have met a number of those who have benefited, and simply ask that every effort be made to enable people with good qualifications and good English to move into suitable work.

The media have enjoyed a field day over cross-Channel arrivals, but there can be no doubt about the desperation on the part of those facing the risks. We can gain a sense of proportion by comparing the numbers of cross-Channel arrivals with the much greater volume of visas provided for students and workers, and indeed for Ukrainians and British overseas nationals.

I have, I hope, outlined the weaknesses and omissions in these changes to the rules. They provide serious grounds for regret. I trust that subsequent speakers will touch on positive steps that this country could take to prevent loss of life in the channel by closer co-operation with France. If speakers can offer new ways of making the asylum process more humane, I will be delighted. I beg to move the Motion in my name.

My Lords, I begin by saying how sad I am to see the Home Secretary depart from her job today. I had very high regard for her; she brought great legal expertise and determination together. At the same time, I wish Grant Shapps well in his new job as Home Secretary. He was my neighbour in Hertfordshire and is a long-standing friend of mine. I hope that he will pursue with equal diligence the obligations we have and the commitments that we had in our manifesto.

However, there is little point in tidying up the law in the way that we are doing today if the law itself can be turned inside out by the courts. It is pretty clear that that is what has happened time and again in recent years. As a result, we have some 250,000 rejected—failed—asylum seekers in this country who, since 2005, have not been returned to their countries or removed from this country. That is in addition to the 125,000 who have been granted asylum.

The rate of acceptance on first application in this country suddenly doubled after the Windrush scandal, although it is hard to see what the logic of that doubling was. The effect is that we now accept twice as high a proportion of asylum seekers on first application as does France, on the other side of the channel—which is doubtless one reason why people choose to leave France and come here, even by dangerous routes.

Can I just deal with three or four delusions, illusions or mistakes that are very prevalent? The first is that we have no safe routes into this country. The noble Lord, Lord Hylton, made some very sensible points, particularly about the constant change in the regulations we face. We have some 13 different routes and they have exploded in numbers over the last year. We have seen the best part of 300,000 people arrive in this country and be accepted by safe migration routes, including 150,000 from Ukraine. That is a wonderful way we are responding to the problems in Ukraine and almost all of them want to return if and when peace returns to Ukraine. Sadly, that may not be immediate and many of them will put down roots in this country, so will add to our population. They are wonderful people, but we have to take into account the fact that we have a massive increase in our population. There were 120,000 from Hong Kong—again, one understands why—and 20,000 from Afghanistan. All arrived by safe routes. So when President Macron says that the problem with Britain is that is has no safe routes, he is simply out of touch with what is happening in this country.

The noble Lord, Lord Hylton, said that there can be no doubt about the desperation of people who cross the channel in small boats to come to this country. Let us be quite clear: they are coming from France, Germany and Belgium. If they are desperate, what is it about those countries that makes them desperate? They are not coming here from Afghanistan or Iran by boat; they are coming from France and Germany. One of the reasons can be that they have applied or could apply in those countries but know they would be rejected, whereas here our system—having been degraded by constant legal undermining of the rules—makes it much more likely that they will be accepted, even if other countries would not consider them legitimate asylum seekers.

The third point I want to make is that it is an illusion to say we have taken back control of immigration. Over the last year we have given over 1 million visas to people to come and settle in this country. Where are the houses going to be?

I am grateful to the noble Lord for giving way. I was agreeing with him about the numbers who have been given visas—a tiny fraction of whom are asylum seekers. I am not applauding the millions of people who are being given visas; I was agreeing with him that that was happening.

I misinterpreted his “Great”; he was saying that I am great rather than that the number is great. That is good.

It is an extraordinary thing: 1 million people. The problem with immigration is not that immigrants are different from us, but that they are exactly the same. They need homes to live in, medical facilities, schools and everything else. We have not got enough for the existing population, so we ought to be thinking very clearly: is it wise to issue 1 million visas for people to come and live in this country?

Finally, it is constantly asserted that migration is good for economic growth. In the last decade and a half, we have had the highest rate of immigration to this country in our history and the slowest growth in productivity. I rest my case.

My Lords, I want to briefly make some observations about the remarks of the noble Lord, Lord Lilley, and ask the Minister one or two questions of clarification. Before I do, I point to my interests in the register and make it clear that I am speaking in a personal capacity.