Contribution
My Lords, the International Monetary Fund, in its latest World Economic Outlook, has warned that the energy shock stemming from the Iran war will hit the United Kingdom harder than any other advanced economy, notably in terms of growth and inflation. It is also the case that UK borrowing costs are higher than those in other comparable OECD countries. In short, the prospects are depressing in the extreme. What, we ask ourselves, are the Government proposing to do about it?
We read one apparent answer in today’s newspapers: freeze rents; in other words, adopt a policy which has always failed everywhere that it has been tried. Can the Minister tell us when we will be told the details of this latest whizz idea, or will he be willing to rule out the ridiculous idea definitively from the Dispatch Box, given the adverse effect on the share prices of some property companies today?
I turn a much more serious subject: defence. The world situation is becoming more worrying by the day, which makes the much-delayed defence investment plan even more important and the funding shortfall of £28 billion ever more disturbing. A responsible Government would act with vigour to progress matters. Experts are unanimous in the view that our capabilities are woefully short of what is necessary. What have the Government done about this unhappy situation? The answer is: very little, unless delay constitutes action. Can the Minister tell us when the defence investment plan will finally be published?
I turn to North Sea oil and gas, where there are possibilities that would help our economic situation by increasing output, increasing well-paid jobs and improving our balance of payments. But the Jackdaw and Rosebank decisions do not seem to have moved from the desk of the Secretary of State. His ideological prejudices are well known, though difficult to understand in the circumstances that now face us. When we last debated the Middle East, the Minister seemed warmer to North Sea exploitation than I had expected. But, in short, we are still seeing more delay.
We know that the Government face very difficult circumstances, many of which are exogenous and they can do little about, but what action they have taken has tended to make matters worse, and what they have left undone is significant. Will the Minister urge his ministerial colleagues to get serious, to avoid economically damaging ideas such as freezing rents, and to take those decisions which need to be taken as a matter of urgency?
The truth is that the Government’s position on energy is woeful, as we heard during today’s PNQ. Let us take the Jackdaw gas field: it is ready, the infrastructure is in place, the operators are prepared; it could supply enough gas to heat 1.4 million homes by the autumn, and more cleanly than much of the gas we currently import; and it would strengthen our energy resilience by 6%. So why, in the face of rising global instability, with energy security more critical than ever, are the Government not bringing the Jackdaw field online? Equally importantly, why is the industry so fearful that the Government will not approve the Rosebank field? Is it right?
From an energy perspective, Britain could scarcely be entering this crisis in a weaker position. We face the highest industrial energy costs in the developed world, crippling our manufacturing industries and making life very difficult for our SMEs—and consumer prices are not far behind. This is a dangerous position to be in, and I gently say to the Minister that the public will not thank the Government for ideological gestures. They will expect, and they deserve, practical action to secure our energy future.
What unites each of these issues is the absence of domestic resilience. The war in the Middle East has exposed that weakness, but it did not create it. So the question for the Government is a simple one: will they now act to strengthen the resilience of this country, restore credibility to their economic and energy strategy, and provide the certainty that our Armed Forces, our businesses and our households all need—or will they continue to rely on hope when what is required is action? The time for hope has passed, and the time for decision is now.