[Speaker] Lord Allen of Kensington, first order of question.
[Lord Allen] I beg leave to ask the question standing in my name in the order appeared.
[Lord Callanan] My Lords, the government understands the pressures people are facing
with the increased costs of living caused by high global energy and goods prices.
To help with energy, the government is providing a £9.1 billion package
worth up to £350 each for over 28 million households.
The energy price cap ensures prices fairly reflect the underlying cost of supply.
The vulnerable continue to receive support through the Warm Homes Discount,
the winter fuel payments and cold weather payments.
[Lord Allen] I thank the minister for his reply.
And he'll be aware that the UK inflation rate is now at a 40 year high
and expected to rise further.
Energy prices are at an all time high and expected to rise further.
In fact, today we're paying £1.70 pence per litre for fuel.
Interest rates are at the highest for more than a decade and expected to rise further.
But rather than giving families a helping hand,
our Chancellor has dipped his hand in their pockets with the biggest cut
in out of work benefits in 50 years, the biggest cut in pensions in 50 years
and the biggest tax burden in 70 years.
Can the Noble Lord the Minister say what the government will do to reverse this situation
where more than 4 million people say they've gone without food,
more than six million people say they've gone without heating, water or electricity
and more than one in five adults say they're worried about being able to pay their bills.
[Lord Callanan] Well, I don't doubt that it is an incredibly difficult time
and the government are fully aware of the pressures facing many households.
And I can tell the Noble Lord that we are monitoring the situation very closely
and the Chancellor and the rest of the government stand,
ready to take any further steps if they are needed to support households.
[Lord Teverson] My Lords, the government itself is going to make a windfall gain
because of the electricity price contracts for difference,
the price of the market will move above the strike price.
How many billions extra will the treasury get over the next year
and will that be fed back to hard-pressed consumers?
[Lord Callanan] Well those payments of course don't go back to the treasury,
they are all contained within the electricity price system.
So ultimately they go into either subsidising further renewable energy
or to providing additional policies that are paid for through levies on bills.
[Lord Cormack] My Lords, as the expression 'conservative ideology' is an oxymoron,
why is it being called in evidence by those who are arguing against
putting a windfall tax on fuel?
[Lord Callanan] Well this is a complicated issue and there clearly is a variety of views.
I think it's important that we bear in mind the importance, I think everybody across the house
wants to see huge amounts of extra investment going into particularly our renewable energy
system, that will of course be provided by those same companies.
[Baroness Greengross] The Institute for Fiscal Studies has pointed out that since
council tax in England is still based on 1991 property values,
the recent £150 support for people in council tax bands A-D
in England will mean that some people are missing out on the support
that neighbours in similar value properties receive
just because their home was worth more than their neighbour's
30 years ago.
How will the government address this issue to ensure that support is targeting
where it's really needed?
[Lord Callanan] Of course the Noble Lady makes a very good point which is of course
by the fact council tax bands haven't been revalued for a considerable period of time,
and that is why the government is providing £144 million worth of discretionary funding
for local authorities to support households who need support
regardless of the council tax band they're in.
Precisely the kind of people the Noble Baroness refers to.
[Bishop of Oxford] My Lords the Minister and I'm sure other Noble Lords will be aware
of the paradox that it is often the very poorest people in society who pay a higher tariff
for their electricity through prepayment metres
and the like of them, they may not have bank accounts
to be able to pay on any kind of credit.
Is the government proposing to do anything to help and support those who are locked into
these higher energy prices when they can least afford them?
[Lord Callanan] Well I do understand the point that the Right Reverend Prelate is making,
but of course those households are also subject to a price cap and the
slightly higher price for prepayment metres reflects the cost of the
fact of course that those customer costs energy suppliers more to serve.
[Baroness Jones of Moulsecoomb] My Lords, could you explain very simply why energy prices are going up
when renewable energy prices are as cheap as they've ever been and falling.
Does that mean the government didn't invest enough in renewable energy
when for example the Greens started telling them they should?
[Lord Callanan] As the Noble Baroness knows and we've debated this extensively,
we have the largest off-shore renewable sector in Europe, so we have been investing
considerable sums in renewable energy and in fact in the energy statement
a couple of weeks ago, we announced that even further ramping up of what has been
a very successful sector.
[Baroness Hayman of Ullock] My Lords, I've been listening very carefully to the Minister's
response about everything the government is doing,
but more families are falling into poverty.
So we need more than the monitoring he talked about, we need steps, we need steps now.
So I genuinely don't understand his response to the Noble Lord around the windfall tax.
Why will the government not bring that in now?
[Lord Callanan] Well, I know the opposition likes to have these sort of easy soundbites
that there is some enormous pot of free money that we can somehow access,
but of course, money that is taken off those companies is also money that doesn't go to
shareholders to...
many of whom are pension funds that pay pensions of people up and down this country,
they're not greedy plutocrats that can just absorb the money.
And so we are of course keeping all options under review, but it's not a cost free option,
it would result in lower investment in the renewable energies
that everybody keeps telling me we want to see it in the future.
[Lord Howell of Guildford] My Lords, as China has stopped demanding extra gas at the moment
because their rate of growth has come to a halt,
and as there is now plenty of gas available on the high seas, both contract
and spot prices, why can we not get some benefit for that for our consumers?
Why do we have to assume that gas prices remain £5 and £6 as high as last year
when there is plentiful gas and energy in particular around?
[Lord Callanan] And the Noble Lord makes a good point, but of course the,
as a result of the price cap, most energy companies are hedging their supplies
based on current prices.
There are plenty of other supplies of LNG but of course capacity able to be injected
into the system is limited due to the number of off-shore loading points that we have.
We actually have some good numbers in the UK, but they are being fully utilized.
[Lord Rooker] What is the core difficulty of changing benefits mid-year,
because surely the big advantage of Universal Credit is, bearing in mind that probably
60 percent of those who are really badly affected are in work,
but there's no distinction for Universal Credit, if you're in work, out of work,
if you're in it.
And I don't understand the technical problem that's being raised
why Universal Credit because it's the quickest, easiest, the most targeted thing
that the government could do, and it doesn't need to wait.
So why is it waiting?
[Lord Callanan] Well as I said, the Chancellor is considering a range of options
to mitigate the further expected energy price cap rise in October
and we keep that and all other matters under constant review.
[Lord Lancaster of Kimbolton] Supply is of course a key factor when it comes to price,
so given the conflict in Ukraine, can my noble friend outline what the government is doing
to ensure that we have energy and security supplied.
[Lord Callanan] My noble friend makes an important point and
the best thing we can do to ensure security of supply is to generate more of our supplies
here in the UK.
So that ensures that we need to keep on producing as much oil and gas as we can
from the North Sea during the transition period and we need to ramp up the amount of
home grown renewable and nuclear that we are also doing.
[Baroness Watkins of Tavistock] My Lords, I think some of the current plans the government have
to improve this situation, and I recognise that's what they’re trying to do,
will not necessarily benefit those who are on disability benefits.
And I think we have to accept that people who cannot move easily in order to stay warm
demand greater help with the resource of fuel.
Could you please comment on that, could the Minister please comment on that statement.
[Lord Callanan] The Noble Baroness is referring to the Warm Homes Discount
and we are increasing the amount of money being generated from the Warm Homes Discount
going to a wider cohort of people, but we are trying to concentrate those payments
on those who need them most.