Queen's Speech — Debate (5th Day)

Part of the debate – in the House of Lords at 6:41 pm on 16th May 2012.

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Photo of Baroness Worthington Baroness Worthington Shadow Spokesperson (Energy and Climate Change) 6:41 pm, 16th May 2012

My Lords, I am honoured to be able to contribute some words to this debate on the humble Address. We are living through difficult times: economic growth eludes us; long-term unemployment, particularly among the young, is rising; the divide between the haves and the have-nots grows ever wider; and the core elements that provide a safety net for those most in need are being eroded. Doctors' surgeries are closing; morale in the NHS is rock bottom; swingeing cuts are closing front-line services; access to legal aid has been drastically curtailed; policing is being privatised by the back door; welfare reforms make it much more likely that people will fall between the cracks even while philanthropy and charities are being undermined; and, to top it all, the cost of living is rising.

It is sad to say that the contents of the gracious Speech will make matters worse, not better. It seems that the Prime Minister and his Government continue to govern the country for the benefit of the few and to the detriment of the many. This is perhaps not a surprise. The Government have repeatedly shown that they are incapable of empathising with people born into less fortunate circumstances than themselves. They like to tell themselves the lie that we are in this mess because somehow the British public are not working hard enough, quite forgetting that the cause of the recession was brought upon us by the financial elite, who also have become detached from the real world, risking our future on ever more complex and risky financial products in the belief that growth can be magicked out of thin air with clever algorithms and confusing products and not by investing in productive companies and in people.

The only way out of this mess is to begin to rebuild our economy in the real world, reducing our reliance on the financial sector, investing in the things we excel at: high-quality and precision engineering; the digital economy; higher education; tourism; the media and the arts; and, critically, leading the world in tackling climate change and reinventing our energy systems to beat our addiction to expensive fossil fuels.

On this last point, the Government are to bring forward legislation to deliver reform of our electricity markets. But are these reforms in the interests of the many? Will they reduce consumer bills? Do they guarantee that investment will flow into low-carbon technologies? The answer, sadly, on all fronts, is no. The Bill has been written at the behest of the nuclear industry, which, in reality, is represented by just one state-subsidised French company. Those who want to build today's reactors know that they cannot compete on the open market and have persuaded the Government to offer long-term contracts which guarantee prices. The chosen mechanism of support-contracts for difference-suits large-scale, base load providers but does not suit the development of offshore wind and other renewables. It is not certain whether they will clear state aid rules and they will do nothing to oblige the companies winning the contracts to build anything. We hear that they will be underwritten by the consumer-not the Government-which is a novel legal arrangement that may not give the investors the confidence that they say they need. Just today, six energy companies, including one of the big six, have written to the Government describing the proposals as a potential train wreck. We urge a rethink. It is likely to be a bad Bill because the existing nuclear industry is still the cuckoo in the nest of the UK energy policy, distorting it and robbing resources from the other elements of energy policy.

On top of this, in these difficult times of record energy prices, rather than saving consumers' money, it will cost them more. The one element that we were promised, which would help to reduce consumer bills, was the creation of a market for reductions in energy demand-so called "negawatts"-but we now we hear that this important element of the Bill is unlikely to be included. Why? The answer is because it would serve the interests of the people, not the powerful elite who control our current energy policy and markets.

Another major failing is that the Government are interested only in electricity market reform. What about the two other elements of energy policy: how we heat our homes and how we fuel our vehicles? Here the rising price of oil and gas has had a great impact on the household budgets of millions of people who are still dependent on their gas boilers to heat their homes and the petrol pump to get to work. On these markets the Government have been silent, despite the fact that there is a growing problem that they must face up to: falling tax receipts from fuels. Squeezed by rising prices, people are taking action to insulate themselves by buying smaller and more fuel-efficient cars and turning down the thermostat. However, as the DailyTelegraph mentioned yesterday, it seems that the only answer that the Government have is to increase fuel duty, instead of having a complete rethink and ushering in market reforms that help to provide a smooth transition to a lower carbon future across all energy sectors. They are, after all, all interrelated and we need a thorough and much more imaginative take on how to do this market reform and not simply to focus on electricity.

Rising fossil fuel prices are a huge issue that we must address. However, we do not need all our time to be taken up with considering a nuclear subsidy Bill that masquerades as a market reform Bill because no one is brave enough to be honest that that is what they are doing. For those struggling to pay their gas bills, we need to look again at how to improve the quality of our houses and to encourage greater use of electricity for heating. We need a return to the Economy 7 policies of the 1970s but, this time, with a view to enabling people to benefit from the increased use of energy from wind and solar power when the wind is blowing and the sun is shining. In transport we need to challenge the might of the oil companies and introduce real competition, not just between the oil majors, at every level of the supply chain, but also to enable alternatively fuelled and electric cars to penetrate the market more quickly.

Above all, we need a Government who can empathise with the real difficulties experienced by people around the country. We do not need a group of people detached from the real world governing the country for the benefit of the elite. Sadly, there is little or nothing in this gracious Speech to show that the Government have either the desire or the imagination to do this. This legislative agenda will not lead the country towards a more prosperous and secure future and it is a missed opportunity. I am sorry I cannot be more positive and that, ahead of us, we have three more years of trying to correct and prevent some of the Government's worst mistakes.