My Lords, I apologise for seeming to arrive into this very important Bill and debate at a late stage, but the plain fact is that on the afternoons when the Bill has been taken before, I always had to chair a Select Committee elsewhere, and I could not be in two places at once. I also declare interests as president of the Energy Industries Council, chairman of the Windsor Energy Group and an adviser to the Mitsubishi Electric company. I am very glad to have a chance to enter the debate at this stage and to follow the noble Lord, Lord O’Neill, whose persuasive eloquence I remember from distant days in the House of Commons. It does not seem to have deserted him now.
Of all the impacts of high prices—due to what I believe to be over-rapid application of decarbonisation strategies and the scramble, which we have been told the Bill is about, somehow to persuade new investment to replace all the plant that is being closed, but only by offering eye-wateringly high prices—the most painful and deplorable, and the one that fills me with the greatest concern, is the impact on low-income families and, in particular, the elderly and vulnerable in this climate, which can sometimes be very cold and cruel.
I am not against the amendments in spirit; behind all of them is a noble intention. Anything that can ameliorate the present situation—people always use the phrase, “We are where we are now”—for the elderly and low-income families and ease the ugly prospects which face people as cold winters descend on us is commendable. Although I think that the Government’s measures, also in the same spirit, have gone some way to meet the problem, it is perfectly natural that, in a very noble way, additional amendments to do still more should be moved. That is perfectly reasonable.
However, I urge your Lordships to understand that all this is only patch and mend. It is far from getting anywhere near the roots of the problem or taking the effective action that could be taken to ease some of the threats of fuel poverty, which is alleged to be exceptionally high in this country. It is patch and mend. Clause 136, which is paraded as a strategy, is not a strategy. It is the Secretary of State’s patch-and-mend list of hopes and intentions. The warm home discount and other excellent efforts like the cold winter payments which operate between November and March—people seem to have forgotten that April can be very cold for many elderly people—are good moves in themselves, but they are not anything like a strategy.
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The real strategic cause of the suffering over which we do have some control is, as I have already suggested, the over-rapid decarbonisation programme—not that I believe that decarbonisation is the right objective, but its handling has been deplorable under both Governments. Certainly its handling was deplorable under the previous Government, and I am not particularly thrilled by the present Government’s continuation of some of these efforts. It is turning out to be incredibly expensive—much more expensive than the original experts insisted that it would be. It is challenging us at a time when wholesale prices for primary hydrocarbons have risen as well. So on top of everything, we are dealing with far greater expense and far higher prices than many of the experts and expert reports anticipated.
The truth is that in Britain but also in Europe as a whole, we are a pursuing a policy of expensive power. It may be for good reasons—if power is made expensive and bills are high people will move more quickly towards taking out these excellent schemes and towards energy efficiency—but that is what we are doing. Some of us believe that that is the wrong way to deal with global warming, the wrong way to reduce CO2, the wrong way to ensure the prosperity of people and the wrong way to help the elderly in their suffering. The best green route, and the best way of justifying the green route, would be through cheap power, not expensive power.
I am frankly astonished at the ruthlessness—perhaps I should modify that and say the lack of compassion—that some folk show in their zeal in pursuing a policy of expensive power and high prices. I cannot understand why that was done. I shall make a party point now. The leader of the Labour Party, an extremely able man, was, as Secretary of State for Energy and Climate Change, the architect of these higher-price taxes—the green taxes which I shall come to in detail in a moment. Now he has gone the other way; he has seen the effect and is calling for a price freeze. It reminded me of the legend of the sorcerer’s apprentice. He unleashed the brooms and the buckets in his green policies, and now he cannot stop them and is calling for a freeze, which is probably going to be ineffective.
So this is regression on a grand scale. The poor and the vulnerable are, through various means, having to pay for a substantial transfer of funds from the consumer to various causes, to encourage investment in new, greener capacity to replace all the mothballed and coal-fired stations and so on. As your Lordships may see, this is a three-pronged assault on the poor.
Recently there has been talk not only of freezing prices but of rolling back green levies. However, one must understand that that is not the only aspect. First, one of the reasons that the energy companies kept indicating, when they were being given a going-over by the Select Committee in the other place the other day, for raising their charges and having to make a substantial profit—I think 5% is the figure they all cited—is the need to finance extra plant to replace the plant closed down because it was deemed to be higher-carbon or unsuitable in accordance with EU regulations. We can accept that reason or not accept it. However, even before we get to the green levies, that is the first charge that arrives on the budget of the poor—on the budget of everyone, of course, but for the poor it is 15% or more of their disposable income. That is layer one of the challenge on prices.
Then, of course, there are the levies themselves, which fall into two parts, as we all know. One part is to finance and subsidise the new very high-cost renewables and the draw-droppingly expensive electricity from wind farms, which, as we know, is half as much again as the amount being offered to EDF for Hinkley Point C for the next 35 years, which in turn is half as much again as we are paying now, which is considerably more than we used to. The other half, oddly enough, is for good social and compassionate reasons: it is to redress the effects of the first two levies. The effect of the social programmes and the compensation is to
offset the effects of the levies that finance the subsidies on the investment required because the pace of decarbonisation is just too fast and mishandled, and to offset the effect of the prices being charged by energy companies. It is an odd situation where the total cost is designed to offset some of the total costs that other measures have just pushed up.
More insulation is of course an excellent thing. There has been talk about woolly jumpers and that may help the younger folk, but all I can say for oldies —I think I can speak for them now; I used not to be able to, but I can now—is that cold limbs in a cold room or a cold house or flat really are extremely unpleasant and may lead to a very grim outcome. There are chilling estimates of how many will die of cold this winter in the UK, which make me personally quite ashamed.
The whole decarbonisation programme behind all this inflation of prices is paved with good intentions, as is the insulation programme. I lived in a house that had additional insulation. It had a thinner attic layer of carbon fibre over it and an additional three or four inches was added over the beams. I cannot say that it affected the bills very much but it may have held the warmth in the house for a little while. However, first you have to heat the house up before you can contain the heat within it, and that costs money. Those are the good intentions, and we all know what destination good intentions pave the way to. A cold house and an inability to meet these high bills is, frankly, hell for elderlies and families.
There is another issue here that we have not discussed because it is in other parts of the Bill: the so-called massacre—which is what the European Commissioner calls the effect of high energy prices in Europe, compared with other parts of the world—of industry and jobs, which means more distress in many more families. I do not vigorously oppose these amendments; I just warn that neither they nor Clause 36 are any cure at all for the real problem, which we should have the honesty to face and address in a sensible and balanced way.