Covid-19: Recovery Strategies - Motion to Take Note

Part of the debate – in the House of Lords at 2:46 pm on 11th June 2020.

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Photo of Lord Oates Lord Oates Liberal Democrat Lords Spokesperson (Energy and Climate Change) 2:46 pm, 11th June 2020

My Lords, I thank the noble Baroness, Lady Hayman, for initiating this critical debate and I thank noble Lords for their important contributions.

I do not always agree with the noble Lord, Lord Forsyth, but I agree 100% with him that an urgent two-day debate on the economy is critical and that it is extraordinary that this has not happened already. I might not agree with everything that the noble Lord would say in that debate but the idea that he, and almost every other noble Lord, is limited to two minutes in debates on issues as important as this is absurd. I hope that the House of Lords Commission will look at this again.

How we respond to the impact of the Covid-19 crisis and rebuild our economy in its wake could not be more important. After all the sacrifices that have been made, after all the suffering that has been endured and after all that we have witnessed of the heroism of our front-line workers, this is not a moment to return to business as usual. It is a moment for a profound rethink about what we value in our society and how we can rebuild our economy to reflect those values.

Do we want to continue with an economy and society in which 10% of the population holds 50% of the wealth while NHS staff and care workers struggle to make ends meet, where 4.2 million children were living in relative poverty in 2019 and where the IFS expects that number to rise to 5.2 million by 2022? Do we want to continue with an economy and society in which 45% of children from black and minority ethnic groups live in poverty, compared with 30% of the population as a whole and 26% of the children of white British families, and where 72% of children growing up in poverty live in a household where at least one parent works? Do we want to continue with an economy in which not only are poorer people living shorter lives but, as research suggests, life expectancy is going down for some? Do we want to continue with an economy that fails to transform itself to tackle the climate crisis, misses the economic opportunities to lead the way on green technology and condemns future generations to an impoverished economy laden with stranded assets and trapped in feedback loops that destroy wealth and endanger our planet?

Those are the questions that we must answer. If the Government go back to business as usual, it will be clear that their answer is, “Yes, that is what we want.”—or, at least, that is what they will tolerate as a price for maintaining the status quo, although, as we know, it is future generations who will end up picking up the bill. I do not think that this is what the British people want, and I hope that it will not be the direction in which the Government travel. We have much work to do to tackle the challenges posed by pre-existing structural injustices in our economy, which are now being compounded by the impacts of the Covid-19 crisis: the lack of social mobility across our society; gender, racial and intergenerational wealth disparities; the discrimination that still exists in the workplace and with regard to access to capital; and the desperate plight of many of those on universal credit.

Yesterday, the Social Mobility Commission published its report on the government response to its recommendations over the past seven years. It marked the Government’s responses to 76% of its recommendations as either red or amber—that is, that the Government had made either little or no progress or insufficient progress towards meeting them. The Government had met less than a quarter of its recommendations in full. The report notes that social mobility has never been more important, as the young and the poor will suffer most from the economic downturn as a result of Covid.

However, despite the rhetoric of government that it intends to level up opportunity, it is not acting to make its words a reality. If we are to build a dynamic and sustainable economy, it will be critical that we improve social mobility and remove additional obstacles facing BAME communities. Sadly, the Government’s record in that respect is no more encouraging. Their response to most of the recommendations in the report on Race in the Workplace by the noble Baroness, Lady McGregor-Smith, was one of either obfuscation or rejection—another opportunity to show that black lives matter was not taken.

Likewise, as we rebuild after Covid, we need to recognise the role of SMEs as the backbone of our economy. They need continued access to capital and protection from the frequent failures of the banking sector to provide the support they need. SMEs are particularly to the economy for BAME communities and often find access to capital the hardest. The Government must give clear direction to the banks that, after all the assistance provided to them in the banking crisis, they now need to assist in supporting the productive economy.

It is critical that we get these things right as a country, and it is equally critical that the steps we take to emerge from the Covid crisis are rooted in delivering a green recovery and a sustainable green economy for the future. As the noble Baroness, Lady Hayman, said, if we do not act decisively now, the climate crisis will deliver an increasingly dystopian future for all of us the world over. We have to use this crisis to accelerate our progress towards net zero.

I welcome the fact that the Government have placed themselves under a statutory obligation to meet the net-zero target by 2050. But the truth is that we are nowhere near taking the policy steps necessary to achieve the objective. The Government have to accept that their words will become increasingly hollow if they do not start to match them with actions. To date, the Government seem determined to pursue an approach that seems to be a combination of Saint Paul,

“the good that I would I do not”,

and Saint Augustine,

“Lord, make me chaste—but not yet.”

We cannot afford for this approach to continue. Meeting our obligations under the Paris agreement will be incredibly challenging in any event. We therefore cannot afford to waste a moment in seeking to tackle them.

An immediate step, which was raised by a number of noble Lords, is the need for an urgent programme to start retrofitting our existing housing stock, which contributes about 15% of the UK’s greenhouse gas emissions. This would not only tackle climate impacts but would be a source of employment across the whole of the country. It should be a priority for the Government’s green recovery plan, and I hope that the Minister will be able to tell us what concrete steps the Government are planning in this regard.

Equally, we cannot go on building homes that do not meet zero-carbon standards. My noble friend Lord Stunell introduced such a policy of zero-carbon homes during the coalition Government only to see it scrapped by the Government that followed. As a result, we are allowing developers to profit from building properties that are not fit for purpose, while handing on a bill for the future. As the climate change committee has made clear, if we do not tackle the energy efficiency of existing housing stock and new build, we have absolutely no prospect of meeting our zero-carbon objective. We also need to look at the sort of innovative district local heating schemes raised by my noble friend Lady Walmsley and other noble Lords.

The UK’s cutting-edge capacity in research and development, which the noble Baroness, Lady Hayman, highlighted, offers us the opportunity to ensure that the UK is a leader, not a laggard, in building a productive and competitive green economy. However, as my noble friend Lord Shipley said, if we are to take advantage of that capacity, government will need to think hard about how it supports investment, research and innovation. Clean hydrogen is one area where the UK has the opportunity to lead the world, but it will require government investment to support research into scaling up cost-effective production through electrolysis from renewable energy sources. Tackling the challenge of producing cost-effective green hydrogen will be vital to tackle climate change, and we need government to take a much more committed and focused approach in that regard.

There is so much we need to do across every area of government if we are to build a fair, clean and sustainable economy. Above all, it will require a massive shift in the mindset of the Treasury and the Government as a whole. The Government have to recognise that the debt we have incurred and will continue to incur over the period of this crisis has to be managed for the long term, that we need significant investment to build the new green economy, and that any return to austerity will betray our people, exacerbate our economic challenges and do nothing to transform our economy.