King’s Speech

Lord Frost Excerpts

Thursday 14th May 2026 Lords Chamber

[Lord Frost (Non-Afl)]

My Lords, I am delighted to speak in today’s debate on the humble Address. As noble Lords will probably expect, I plan to focus on European issues and, in particular, the sadly misnamed European partnership Bill, which would be better called the European subordination Bill, for in reality that is what it will achieve: it will deprive this Parliament of any say in areas where the Government have agreed to accept EU law and dynamic alignment. I look forward to debating the Bill at great length when it reaches your Lordships’ House.

The bigger question behind it, of course, is: why are the Government going down this road at all? Why are they embarking on this reset? There are three reasons. The first is slightly surprising, and we heard about it this week: the apparent belief of the current Prime Minister that we can get Britain to be at “the heart of Europe”—a retro phrase if ever I heard one. It takes me back to John Major in 1990, and a lot has happened since then. There has been a lot of back and forth, but at no point in that period has this country ever been at the heart of Europe, and I doubt very much that it ever will be, for we do not share the goals of those who run and manage the European Union.

Looking back over that period, we spent almost our entire period of EU membership under both parties resisting any kind of European defence agreement. Indeed, last year the Polish Foreign Minister celebrated the fact that we left because Europe could now get on with such an agreement. That is not being at the heart of Europe. Neither party wanted to be part of the justice and home affairs agreement, and neither wanted to join Schengen. Of course, the reason we are not in the euro is thanks to the many efforts of the man who is now apparently an adviser to the current Prime Minister, the former Chancellor Gordon Brown. The truth is that any policy based on trying to put this country at the heart of Europe will be based on an illusion and will lead the policymakers astray. I suggest that that is exactly what is happening. That is the first reason.

I turn to the second reason. Ministers ask us to believe that there has been significant economic damage from leaving the EU. Unfortunately for them, the truth is that our growth pattern has not changed compared with those of our European comparators. However you cut the figures, Brexit does not show up, and the noble Lord, Lord Redwood, has already embarked on this point. Look at the World Bank figures since the 2008 crash. If noble Lords think that 2016 was the inflection point, I note that before 2016 we grew at about the same speed as Germany and faster than France, and after 2016 it was the other way around. If noble Lords think that 2020 was the inflection point, I note that before 2020 we grew a bit slower than Germany and faster than France, and since 2020 we have grown faster than both. If noble Lords think that 2022-24 is the most important period, I note that then we grew faster than France, Germany and the eurozone. There is an alternative world where Ministers might be talking about this morning’s growth figures as reinforcing what the British economy could achieve outside the European Union, for none of the reset measures is actually in force yet. I do not expect to hear that argument from the Front Bench today.

What is going on, then? Why can you not see Brexit in the figures? My view is that there has been some small transitional effect from leaving the single market and the customs union—maybe 1% or 1.5% of GDP. It is hard to tell. I certainly would not put it anything like as high as the OBR does. But of course that is not the only thing that is going on. We have made reforms since 2020. We have, happily, stayed out of the worst of the EU’s legislation. In particular, EU laws on AI have helped make this country the third centre in the world for AI and brought in much investment, which is probably the major reason for the growth figures we have seen. We have reformed some financial services, and we have reduced tariffs to the rest of the world and made food cheaper. Indeed, the Government themselves have just done another wave of that, which makes one think that they must think there is some value in it. We have innovated in food and gene editing, with fewer obsessional bans of pesticides and so on.

Of course I wish we had done more—we should have done much more—but what we have done very plausibly makes up additional growth of perhaps 1% to 1.5%, which is why you cannot see Brexit in the figures. The costs of Brexit, such as they are, are paid, but the benefits are still to come, and there are many more to be had. But, sadly, this Government are doing the best they can to squander them. The real economic risks do not come from Brexit at all; they come from bad policy-making here and in the European Union. Perhaps that is why the latest Deloitte poll of CFOs shows that they are now more worried about

“economic weakness in the euro area, and the possibility of a renewed euro crisis”

than about the effects of Brexit. So, in summing up, instead of repeating the zombie figures of 4%, 6%, 8% or whatever, can the Minister perhaps comment on what the real-world data actually shows us, and therefore explain why it is so important for us to give away our legislative and economic power to deal with a problem that does not exist?

Finally, the third reason is that the Government have messed up the negotiations. They did not know what they were doing. It is clear to see what happened: in opposition, they believed that the EU would simply warm to them, and it would be easy to negotiate something better than the TCA while remaining within the so-called red lines. They believed that some of the outstanding problems from the TCA were outstanding because we had simply chosen not to deal with them for ideological reasons, rather than because the EU was not interested in negotiating collaborative solutions. They thought that a few token offers in the manifesto and lots of warm words would fix things. Well, they did not and they have not, and I imagine our negotiators are a bit more realistic now.

However, instead of drawing the correct conclusion that it would be better to try to make the TCA work and focus on economic reform in this country, they cannot admit the misdiagnosis. They have got sucked into the machine. They realise that what they promised cannot be delivered, so their only option to avoid looking like they got it all wrong is to take whatever the EU is prepared to offer. So now they are in the traditional position of British Governments: colluding with the EU about what is being agreed, with the EU saying, “If you accept our way of doing things, we will help you tell your own people there’s nothing to see here”. That really is the only explanation for why the Government have achieved so little while being dragged so far from its manifesto commitments; they are simply misleading the British people about what is going on.

Let us have a final look at what their manifesto actually said. It promised only four things, actually. On help for touring artists, they have got nothing. On mutual recognition of qualifications, they have got nothing. On the UK-EU security pact, they have got an agreement to attend meetings. On the veterinary agreement, the fourth, they have got that, but they have got a lot else besides: they have been sucked into the EU single market on food. Against that, they have agreed lots of things that were never in the manifesto. Where in the manifesto is the 12-year extension on fishing grounds? Where in the manifesto is the commitment to dynamic alignment and obeying EU laws with no say? Where is the product standards Act, which would allow Ministers to align with the EU by fiat? Where is the commitment to follow EU rules on cars? Where is joining EU carbon pricing? Where is joining the single market for electricity? Where is joining the EU’s customs union rules for carbon-intensive goods? Where is rejoining Erasmus for £1 billion a year? Where is the youth mobility scheme that is apparently going to be more ambitious than ever, according to the PM on Monday. The answer is: nowhere. The dams of the red lines are long since broken and the incoming tide of EU law is once again flowing up the estuaries and rivers of this country’s independence.

Only once we have ended this constant attempt to try to pretend the British people did not take a decision will we get back to a proper relationship, without passive aggressiveness on the EU side and a chip on the shoulder on ours. We know what needs to be done: we need to reverse the reset and we need to remove EU law and foreign courts, and we need to do that in the whole country, in Northern Ireland as well as in GB. Next time, I hope we will finish the job. It needs to be done and it cannot come soon enough.

UK-EU Customs Union

Lord Frost Excerpts

Thursday 29th January 2026 Lords Chamber

[Lord Frost (Non-Afl)]

My Lords, I am delighted to follow the noble Lord, Lord Offord. As he says farewell to this Chamber, I congratulate him, on behalf of the whole House, on his forthright but reflective valedictory speech. We overlapped only very briefly as Ministers in the last Government, but, as I think we all know, the noble Lord served that Government with an energy and determination that were very much needed at times.

If I may say so, not least because it was a step that my own party stopped from me taking at the last election, I admire the noble Lord for having the courage to relinquish his seat in this House and move properly to elective politics. I have little doubt—and, having heard what we have heard, I am sure that none of us can have any doubt—that he will be an effective and tenacious campaigner in Scotland. I wish him personal fulfilment in this new project and whatever follows it.

I turn to the subject of this debate. Here we are again. This is nth instalment of the long-running box set series of the British establishment’s obsession with being in customs union with the European Union. This has lasted 10 years. We saw it straight after the Brexit referendum, and, as early as January 2017, the noble Baroness, Lady May, in her Lancaster House speech, spoke of a “customs arrangement”, rather than leaving the customs union properly. By 2018, the then Cabinet Secretary, Jeremy Heywood, had invented the Heath Robinson-style dual customs arrangement—a Schrödinger’s customs union that apparently left us both in and out of the customs union at the same time. The 2018 withdrawal agreement would, of course, have kept the whole country in a customs union with the EU and given the exit keys to the European Commission.

Finally, the then Prime Minister, Boris Johnson, and I, did what had to be done. We took Great Britain out of the customs union—Northern Ireland, as we then hoped, was to follow later—giving us freedom of trade and the ability to set our own regulations. Until that point, we had seen nothing but a complete lack of confidence in Britain’s ability to trade with the EU, as we did, and do, successfully with the rest of the world.

However, here it is again; the obsession has returned. Just as everyone has got used to the new situation, with remarkably little difficulty, the same voices return. It seems that the Government increasingly want to wind the clock back. This is simply a grasping after nurse—a search for a refuge from hard decisions in the warm and deadening embrace of the Brussels institutions.

The arguments against doing this are just as strong as they have always been, and we have heard many of them today. First, trade deals under the customs union give third countries preferential access to our market but do not give us preferential access to theirs. Secondly, we get no say in EU negotiating positions and no assurance that our interests will be protected. Thirdly, as we are told, we do not get even proper friction-free participation in the EU’s market unless we join the single market as well. I am grateful to the noble Lord, Lord Newby, for at least being honest in saying that that is also his policy objective. Fourthly, we lose our ability to lower our own tariffs, which we have done for third-country food that we do not produce ourselves. Even the Government reduced some tariffs last year, and they made a point of saying so. Fifthly, we would have to undo our own trade agreements. Is it seriously suggested that, having joined, we should now leave the CPTPP and our trade deal with India to join the EU’s putative deal, which will have been negotiated with none of our interests in mind? It makes no sense.

The Lib Dems know this. They know more. I think that is why they claim to think they can negotiate some sort of special customs arrangement—oddly enough, one that excludes agricultural goods, even though that is the area in which, under the reset, we will be joining the single market. I can tell them that the EU does not do this sort of bespoke agreement, and we should have learned that in the years after the referendum. As for the Government, they are already dipping a toe in the customs union water by agreeing to follow the CBAM rules of the EU. Some Ministers appear to be for, some against, and I hope the Minister will be able to clarify.

This is all displacement activity. Being part of the customs union again makes sense for only one reason: if you want to start going back towards the EU. It is the Monnet method of one thing leading to another. That is why we hear the calls to rejoin the customs union. I urge its proponents to be honest: if they want to rejoin, they should admit it. They should make that case to the British people and see how far they get. Meanwhile, I hope—although not with great expectation, I am afraid—that today will be the last we hear of the nonsense on the customs union.

The UK’s Demographic Future

Lord Frost Excerpts

Thursday 11th December 2025 Lords Chamber

[Lord Frost (Non-Afl)]

My Lords, I begin by declaring my interest, if perhaps a rather general one, as the incoming director-general of the Institute of Economic Affairs, which has an interest in these and many other questions.

It is a pleasure to take part in this debate and to follow the noble Baroness, Lady Verma, who made a powerful speech, if I may say so, that compelled attention. It is also a particular pleasure, of course, as many other noble Lords have said, to be able to support the noble Lord, Lord Hodgson, today and to pay tribute to all his work over many years. The report on population that we are debating today is entirely characteristic of the serious, evidence-based examination of issues that he has always brought to bear and is particularly needed on this subject.

For there is, without question, a real problem. The numbers are striking. We have heard them already today, so I will not go into the detail, but as the report notes, over the past 20 years the UK population has risen by nearly 10 million people. One-third of that increase has arrived in the past four years or so, and another who knows how many—five, six, seven million—may arrive over the next decade or so. Population growth on this scale concentrated on an already densely packed island and particularly in the south-east of England, which is now one of the most densely populated areas in the whole world, apart from island states—a point that is repeatedly underlined in the report by the noble Lord, Lord Hodgson—obviously poses challenges for housing infrastructure, public services, social cohesion and so on.

As we have heard, the implications of all this are simply not taken into account systematically in government planning. Indeed, the debate on the subject is too often stigmatised, as if expressing doubts about whether rapid population growth is desirable or possible to accommodate marks one out as being beyond the pale. One of the important things about today’s debate is that it is a way of beginning to break some of those taboos about important issues. It is necessary because polling consistently shows that the public feel that the population is growing too fast and that immigration has been too high. They know that something is amiss.

We have already discussed those issues at some length today, but there is one aspect that I want to focus on today, which has been mentioned but not covered in detail, and that is fertility and the birth rate—the number of children that we have in this country. That is where I want to focus my remarks. Just reviewing the facts briefly, all western countries, with the exception of Israel, have seen significant declines in fertility rates. The UK’s current fertility rate, about 1.4 children per woman, is the lowest it has ever been. Thirty years ago, all our population growth—it was much slower then, of course—pretty well came from births, from natural increase; 15 years ago, it was 50:50; now, births and deaths are roughly equal and all our population growth is coming through migration. This is historically unprecedented, at least since the fifth century AD.

Why has this decline in fertility happened? Some of this is obvious. Social changes are real and well documented. Women have more choices, education and careers rightly come first and marriage is delayed, but these changes have been in progress for many years now. They surely account for the fall in the birth rate over the 1960s and the 1970s, but since then, between about 1980 and 2015, the fertility rate—the number of children per woman—has bumped along at around 1.8. That is not at replacement rate, but not so far from it.

Since 2015, however, fertility has fallen precipitously again to around 1.4, as I said. It is tempting to attribute this, and it often is attributed, to particularly British factors such as high housing costs—which are, of course, themselves driven by immigration, at least in part—or to a tax system that is, compared to much of continental Europe, remarkably unfriendly to families. In truth, though, that is not quite good enough. A similar trend is visible across most European countries. It is more or less strong from country to country; the starting points are different, but the trend is still quite clearly visible.

Why is this happening? The only honest answer to give, I think, is that we do not really know. One can of course speculate. The slow to zero growth in incomes across Europe since the financial crash is no doubt part of it. There is perhaps a growth in cultural disapproval—I do not know; I feel it is rarely stated openly, but it is certainly present—of those who choose to have large families. Could it be that the growth in social media since around 2015, the boom in dating apps and the growth in, shall we say, novel conceptions of sex and the family have had some effect on all this? Unpopular though it may be to say it, I will say it anyway: the increasing recourse to abortion, now at its highest ever level in this country with a quarter of a million abortions in 2022, not far off now half the number of live births, clearly has an impact on the figures.

Or could there be something more intangible and more profound—some sort of loss of confidence in the future more broadly? Some say this is about climate catastrophism; others see it as a decline in confidence in the values of western civilisation. Who knows? Whatever it may be, when people do not believe that the future will be better than the present, they tend not to have children. The fact that Israel, a country with strong civilisational self-confidence among many other things, has more or less avoided this trend suggests that there is at least something in that view.

However, we do not really know. That is part of the problem because it makes the issue particularly difficult to deal with, but the fact that we do not know is not a reason not to talk about it. We have to deal with the consequences because they exist whether we like them or not. We have to try to find some way of mitigating them if we cannot change them.

So what can we do? I identify—here I am echoing work by other demographers, notably Dr Paul Morland—three possible solutions to this predicament. The first is to try to have more children and increase the fertility rate back towards replacement. As I say, so far only Israel has really achieved this among developed nations, and other countries that have tried it in various ways, with extra public support or whatever, such as the French and the Hungarians, have had only a very limited effect. That suggests to me that, although there is an economic aspect to the problem, it is not really the whole problem.

The second approach is to give up on trying to change demographics and simply adjust to an ageing society: accept lower fertility and a shrinking workforce but invest heavily in productivity, automation and reform of the labour market and pensions to accommodate this older population with fewer children. That is the solution set out by Professor Sefton in the report of the noble Lord, Lord Hodgson, and Japan is the obvious case study here. The basic difficulty, though, is that, in order to increase productivity in this way, we would need, in this country and across Europe, to embark on a campaign of liberalisation and reform of the economy for which no political party really seems to have the appetite, and which perhaps ageing societies are particularly reluctant to contemplate.

The third approach is the one that we have actually chosen over the last 30 years along with most developed countries, and that is bring in a replacement population: import workers and their families to maintain the worker to dependant ratio and supply the labour that the native population cannot. The problem with that option, whatever its appeal—and it is of distinctly limited appeal to me at least—is not actually a solution at all, for two reasons. First, the economic case for mass migration is weaker than is often claimed. The work of Dr David Miles and others, again as cited in the report, shows that mass migration does not boost per capita growth—it may produce a growth in the absolute size of the economy, but not per capita—and of course there are lots of social and other consequences that we have discussed.

Secondly, and more fundamentally, mass migration is simply a way of deferring the problem. If you try to hold the dependency ratio constant through immigration—that is, at about its current 3:1—to ensure that there are always enough working-aged people to support those in retirement, simple maths shows that you end up needing inflows of half a million to three-quarters of a million people every year in perpetuity.

On that trajectory, by 2050, a third of the British population will be born overseas. I do not particularly welcome that prospect; I do not think that it is a sustainable policy for us, and it may not, in any case, be a solution that is available to us due to the growing scepticism about mass migration that has been touched on in our debate today.

We have to exclude the option of importing a replacement population. The option that is before us is to bring immigration down, close to zero, for a prolonged period. If we choose to resume it later, on a more selective basis, then we can, but it does, of course, leave us with a problem. What can we do to solve it?

First, we can try to increase the birth rate. That involves boosting economic growth, building more houses, reforming taxation and doing what we can to change and reinforce the civic and cultural messages that are around. We should not and cannot count on that working. Secondly, there is the Japan solution: do what we can to create a more productive workforce if we cannot create a bigger one. Luckily, the solutions there are largely the same: more growth, more reform and more incentives to boost incomes, however challenging that all looks. Thirdly, and this is a bureaucratic solution, is the recommendation in the report from the noble Lord, Lord Hodgson, for an independent advisory body on demographic strategy to provide us with honest, evidence-based advice about the trade-offs and the numbers. I would add that this body should be explicitly tasked with studying trends in the birth rate and fertility. It should be tasked with looking at whether measures taken in any other countries across the world have made any difference, and why. More broadly, it should look at what the experience of other nations tells us about managing demographic change.

Finally, we need to break the taboo on discussing these things. I remember the scorn that was poured on politicians sharing my political opinions, such as the former MP Miriam Cates or the current MP Danny Kruger—who are my friends—when they sought to raise these questions two or three years ago. They persisted—credit to them—and now the birth rate is slowly becoming part of the debate. We cannot avoid it; indeed, it is very welcome. Honest, open, evidence-based discussion—on the interaction between fertility and migration, and its economic and social effects—is vital if we are going to restore public trust in our institutions’ ability to solve these difficult questions. The report from the noble Lord, Lord Hodgson, is a vital contribution to that conversation, and I hope that it marks the beginning, not the end, of a more serious engagement with one of the defining challenges of our time.

Online Communication Offence Arrests

Lord Frost Excerpts

Thursday 17th July 2025 Grand Committee

[Lord Frost (Con)]

My Lords, I thank the noble Lord, Lord Lebedev, for securing this important debate and for his powerful opening speech. We now live in a world in which everyone, if they wish to, can make their views known to everybody else. It is a world where political debate is not the preserve of a small establishment group but is open to all. Yet not everyone seems comfortable with this, and rather than welcoming this uniquely open debating environment, we find many politicians talking of disinformation and misinformation and even of putting outright bans on certain kinds of speech.

Unfortunately, the British legislative framework gives them plenty of power to make these words reality. Our legal framework potentially criminalises wide categories of speech and messaging. The noble Lord mentioned a couple of them. We have the Communications Act 2003, criminalising “grossly offensive” messages. We have the Malicious Communications Act 1988, criminalising “indecent or grossly offensive” communications. We have the Public Order Act, which criminalises causing harm or distress, including the notoriously broad “stirring up” offences. All these are aggravated if motivated by “hate”. Of course, we also have the Online Safety Act 2023, which criminalises false communication by an individual; it makes fake news literally illegal.

These laws raise a number of problems. First, there is definition creep, with “grossly offensive”, “abusive”, “insulting” and “false”—says who? What these mean, in fact, depends ultimately not on law but on CPS guidance, which can easily be changed in line with prevailing fashion and fashionable beliefs. Secondly, there is the chilling effect. In a country where, clearly, there are problems of immigration and integration, one person’s fair commentary is another’s abuse or insult. For example, is commenting on different characteristics of migrant communities in the UK and crime levels among such communities fair political comment or is it “stirring up” racial hatred? The risk of drifting over that border and committing an offence creates a chilling effect that means that people are frightened to comment.

Thirdly, all these laws were written either well before this great democratisation in political debate or by legislators who had not caught up. They are written for a world of green ink letters and shouting in the street; they are not written for the very punchy, sharp, meme-based, satirical social media world. In my view, these laws should mostly be abolished or at least focus much more clearly on genuine incitement. Until that happens—and I am not exactly holding my breath about it—our only protection is a Government, an establishment or a wider climate of opinion supporting free speech. Unfortunately, of course, we have no such thing.

We know from the Covid era that the commitment to free speech is thin to start with. Politicians of all parties muse about controlling social media further; they often believe that, in this new world, the ill-informed populace is easy prey to false beliefs and conspiracies. The Government are particularly well placed to do that because most misinformation actually comes from Governments. Trump’s supposed collusion with Russia and the Covid lab-leak theory are two outstanding examples of that. On most political issues there is simply no authoritative interpretation of the facts. Instead, what a fact tells you depends on the interpretation you bring to it, what you see as the goals of a policy. The same fact or number can be used to support very different arguments, depending on your prior beliefs, your interpretative framework and what you are trying to achieve. Thus, the only way to reach an outcome is to have a free debate and see who wins the argument.

I worry that we are heading towards a real crisis. There has always been some censorship in Britain—more’s the pity—but, until recently, it was more artistic and cultural, rather than political. We prided ourselves on being a free country in which we could speak freely. We simply cannot say that now. We are, in fact, all vulnerable. Say the wrong thing in the wrong way at the wrong moment, and any of us might find the police at our door. I hope that the Minister will be able to reassure us when he responds.

Contracts for Difference (Miscellaneous Amendments) (No. 3) Regulations 2025

Lord Frost Excerpts

Monday 14th July 2025 Grand Committee

[Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)]

My Lords, the Government have committed to achieving clean power by 2030 and the contracts for difference—CfD—scheme will play a key role in achieving that ambition. The clean power action plan, published in December last year, outlined several key reforms to the CfD scheme ahead of allocation round 7 opening this August. Following a robust public consultation process, we published our consultation response, which set out that legislative changes are needed to enable the Government to reach clean power 2030 and enable a fair price for consumers.

The draft SI will enable changes to the allocation process to ensure that our clean power 2030 ambitions are met and that consumers pay a fair price. It amends the Contracts for Difference (Allocation) Regulations 2014 budget publication process and the information that the Secretary of State will have access to during the allocation round. With access to anonymised bids and by changing the budget publication process, the Secretary of State will be able to set budgets for CfDs that maximise good value capacity deployment for clean power 2030 and avoid the outcome seen in allocation round 6, where an unspent budget for fixed-bottom offshore wind meant that a potential opportunity to secure additional projects at a good price was lost.

These amendments mean that the Government can bring forward renewable capacity that represents value for money, which will benefit consumers by moving the country away from volatile fossil fuel prices. The instrument also amends regulations to enable the costs of the clean industry bonus to be included in the Ofgem price cap. There needs to be a specific provision in the relevant regulations that allows the CIB to be counted as a specific bill cost as part of wider CfD costs. This is a technical change; the rest of the CIB regulations are already in place. It will ensure that the price cap captures all the relevant factors that might impact on it.

These draft regulations represent an important step in ensuring that we achieve clean power 2030 and protect bill payers now and into the future. They make the necessary amendments to enable the CfDs to adapt as we head towards clean power 2030. This will enable us to maximise renewables deployment at a fair cost to consumers. I beg to move.

[Lord Frost (Con)]

My Lords, I declare an interest as an unpaid director of the campaign group Net Zero Watch. I think the Secretary of State for Energy is at the moment giving a Statement in the Commons on the state of the climate and energy in which he promised—or, at least, briefed—that there would be some radical truth telling. It may be useful to do a bit of that ourselves in this discussion. In particular, there are two areas of concern before I come on to the detail of this instrument.

First, the Government’s policy is based on the incorrect belief that renewables are cheaper than gas. There are different figures out there, of course, but independent commentators show that if you include all the subsidy costs, grid balancing costs and capacity market costs, onshore wind is about twice as expensive per megawatt hour as gas, offshore wind is two and a half times as expensive, and floating offshore is three times as expensive. Even solar, which is perhaps the most of viable of any of these renewables, is 50% more expensive. That is the first incorrect belief.

The second incorrect belief is that prices will go down rather than up, which has been very well debated recently. According to data from the International Energy Agency, Britain had, as is well known, the most expensive industrial and domestic energy prices in 2023. The data for 2024, in so far as we have it, shows that we have the most expensive industrial energy prices in Europe, and now only the fourth most expensive domestic energy prices. However, gas prices are about average for Europe, which strongly suggests that, contrary to everything that is said, gas prices are not driving the high costs. In fact, it is the subsidy, the balancing costs, the capacity market and the inflated capital costs—all of which, by the way, the OBR predicts will increase rather than decrease over the next few years. All those are driving higher prices.

The Government have to pretend to believe the things that I just outlined; I do not know whether they really believe them, but they certainly have to pretend to. The problem is that doing so makes it difficult to run a proper renewables policy, and that is why AR6—allocation round 6—was such a fiasco. As the Explanatory Memorandum says, AR6 constituted a

“budget underspend for offshore wind”.

Alternatively put, renewables producers would not supply at the prices that were offered, so there was an underspend. If renewables are as cheap as the Government say they are, why should that be the case?

Therefore, the Government badly need AR7 to be a success. They need this vast expansion of renewables, whatever the cost, if they are to decarbonise by 2030. But developers are getting cold feet; we saw it in AR6, and we have seen the cancellation of projects since then. Hence this statutory instrument is a different approach. It is very complex and obfuscatory, in the way we have come to expect, and there are many technicalities, but the core of it, as various commentators have set out, is that instead of setting a budget and seeing what capacity the Government can get for the money, they are setting a capacity ambition, seeing what bids come in and then seeing what they have to pay to get that capacity. That is why the Secretary of State needs this anonymised data early and why they need to delay publishing the budget until all this has been assessed. The Government hope that no one will notice what is going on if it is done in this technical way in the statutory instrument, but I am afraid it is a scandal, because we will see prices and budgets go up, and we will not get a proper explanation for it.

I have two other points to make on the instrument. The consultation on it, which the Minister referred to and described as “robust”, involved developers, electricity traders—I quote the Explanatory Memorandum—

“businesses operating in the offshore wind sector”

and “environmental groups”. Those, of course, are all producers. What about actual businesses that have to use energy or electricity and have to deal with the increased energy costs and complexity that come as a result? We know what the consequence is and we know why they did not consult them. It is because they know that prices will go up. We know that because, in the industrial strategy announced a couple of weeks ago, the Government have had to pick sectors and subsidise their energy costs to make their operations viable.

My second point is about the security risk of all this. We all saw what happened in Iberia a couple of months ago as a result of excessive reliance on renewables. The Government say that they are investing in nuclear, gas and, to the extent they can, storage, but, of course, none of this will be ready by 2030.

I shall finish with three questions. First, can the Minister tell us how much the Government expect to spend on the AR7 budget? If prices are falling, why will it not be less than AR6? Can he tell us how much consumer prices are expected to fall as a result of the constant fall, as we are supposed to believe, in the cost of renewables? Secondly, if they did not consult consumers of electricity on this SI and the new methodology, can they commit to doing so in future on similar instruments? Thirdly, can the Government tell us how they expect to fill the gap in production that renewables create before the new gas, nuclear and storage come online well after 2030?

Palestine Statehood (Recognition) Bill [HL]

Lord Frost Excerpts

2nd reading
Friday 14th March 2025 Lords Chamber

[Lord Frost (Con)]

My Lords, it is a pleasure to follow the noble Lord, Lord Dubs, who is always so courteous and so clear in what he says. I am afraid I disagree with him and with the noble Baroness, Lady Northover, and the Bill that she has introduced, and briefly I will explain why.

I think we have to look at the situation on the ground. Israel has been fighting for 18 months now. It is much the longest war it is ever been involved in. It involves not just Gaza, but Lebanon, Syria and even Yemen and Iran. It is imposed huge strains on Israeli society, and there is no end in sight to it. So it is not surprising that Israelis are sceptical about the land for peace concept, and it has failed as a concept, most obviously in Gaza. Indeed, only about a quarter of Israelis now support a two-state solution. Equally importantly, as a PSR poll last autumn showed, only 39% of Palestinians support a two-state solution. This means that a two-state solution seems very unlikely to happen.

That is the context in which we must consider this proposal to require HMG to recognise Palestine as

“a sovereign and independent state on the basis of the pre-1967 borders”.

The only problem is that no such state exists on the ground. There are no agreed borders or territory, as the noble Baroness, Lady Northover, pointed out. That is not the only relevant criterion. Palestinians have very limited control of the territory, for good security reasons. There is no real ability to engage in interaction with other states. They have institutions that are riddled with anti-Semitism and corruption and simply cannot govern. There simply is nothing approximating to a state, which is important because that is the basis for UK recognition of states.

In these circumstances, what is the point of the recognition of Palestine? At best, it is acknowledgement of the concept of a state for a state that does not exist; at worst, it is just a form of international virtue signalling, or even a statement to Israel that we will reward in some way the Palestinians for the chaos and violence of 7 October.

I think the Government are being sensible in saying that recognition can come only as part of a process that is working and in which they can help. I am tempted to think that that is just another way of saying that it is never going to happen, but the problem is that for as long as recognition is a theoretical possibility, it encourages the international community to keep engaging with the phantasm rather than dealing with the real situation. This country should deal with reality as it is, rather than wishing for things that are not going to happen, and that is in our interest. That means backing Israel to do what is necessary for its security to support a realistic and achievable solution to the grievous problems that beset Israelis and Palestinians, which I strongly suspect is not going to involve a two-state solution in the near future, and stopping pretending that gesture politics by those with no skin in the game can help in any way in this. That is why I oppose the Bill.

UK-EU Relations

Lord Frost Excerpts

Thursday 13th February 2025 Lords Chamber

[Baroness Twycross (Lab)]

In response to the question asked by the noble Lord, Lord True, on this, the Government recognise the value of schemes that give young people the opportunity to experience different cultures and work or study elsewhere. We have the Turing scheme and, separate to that, the UK operates a number of bilateral youth mobility schemes with European countries such as Iceland and Andorra and with a number of our global partners. We do not have a proposal or plan for a youth mobility scheme, but we will look at any EU proposals on a range of issues. But, as I outlined in the debate we had on youth mobility in your Lordships’ House a couple of weeks ago, the EU has not yet come forward with definite proposals on this point.

[Lord Frost (Con)]

My Lords, the Government have set out two of their objectives for this supposed reset: an agreement on SPS—agri-food—and some sort of agreement on the emissions trading scheme, with closer linkage between our scheme and the EU’s. In its negotiating document that was made public before Christmas, the EU said that agreements in those areas would be possible only if there were dynamic alignment in the application of EU law, jurisdiction of the Court of Justice and an EU enforcement mechanism. Will the Minister confirm that such terms will not be acceptable to the British Government in this reset? If she is not willing to give such a clear denial, should we not conclude that such terms could in fact be negotiated in this reset?

[Baroness Twycross (Lab)]

On the sanitary and phytosanitary agreement, the Government are committed to pursuing an agreement that could reduce trade friction and bring benefits to both the UK and the EU. The UK and the EU are like-minded partners with similarly high standards, and we have been clear that an SPS agreement could boost trade and deliver benefits on both sides.

Europe: Youth Mobility

Lord Frost Excerpts

Thursday 30th January 2025 Lords Chamber

[Lord Frost (Con)]

My Lords, it is a pleasure, as always, to follow the noble Lord, Lord Watson, and it is a particular pleasure to have been able to listen to the rather endearing maiden speech from the noble Lord, Lord Moraes. I am sure he will bring a lot to this House from his experience.

I also thank the right reverend Prelate the Bishop of St Albans for securing and opening this debate. I listened to his speech with a good deal of interest, and he set out the positions very clearly. I was waiting, I confess, for the moment at which he would show how his positions derived from the doctrine of the Church of England or Christianity more broadly, but sadly, that point never came. Nevertheless, I take them as so derived, and he certainly made a very good political case for the changes in rules in our relationship to the EU that he set out. He referred to the reset, and I want to begin by talking a little about the so-called reset, because that is the context in which we are looking at this idea of youth mobility.

I confess that I am not completely convinced that we need a reset with the EU. The relationship seems to be working perfectly well for the moment, but I accept that there are many who think differently, and that is why the Government have taken us on the path that we are now on. I think it would be better if the Government could set out their objectives for that reset a bit more clearly. I refer the Minister to the comprehensive document that we set out in February 2020 outlining our approach to the free trade association negotiations. It is a pity, to put it no more strongly, that in a negotiation of this nature we have no real guidance on what the Government are seeking to achieve and why, so I guess we have to define it for ourselves.

The way I look at the reset and what may be on the table falls into two categories. The first category is a set of proposals that would be marginal but genuine improvements to the relationship as it now stands. None of them are game-changers, but they are things such as improving the mutual recognition of qualifications procedures, something to do with the arrangements on touring artists—which have been referred to and I am sure will be again—improvements to the conformity assessments, pragmatic relaxation of border processes, e-gates and things such as that. I would put at least some kind of youth mobility agreements into this category, and I will come back to that and explain why. That is one category.

The other category of things that might come up in the reset is more troubling from my point of view, and ought to be more troubling from the country’s point of view as well. Those are things that we are led to believe might be on the table, although we are not quite sure. They are issues such as free movement-like arrangements, participation in asylum or migration arrangements of the EU, application of EU law, alignment with EU rules or regulations in any way, ECJ monitoring in an SPS agreement or accepting EU rules on defence procurement. Those are the sorts of things that start to change the FTA-type relationship that we have into a different kind of relationship, one that involves a degree of subordination, acceptance of lawmaking outside the country, that we had hoped we had got away from.

Some of these things may be on the table for the Government; we do not know. I hope that if—and it is probably when—they come back with something from these negotiations, they will be honest about whether they have accepted changes to the free trade nature of the relationship and lawmaking outside the country through alignment with EU law. That is a fundamental point.

As I have said, youth mobility arrangements can, but do not necessarily, come into that category. They are a prudential issue rather than a problem of principle, at least in certain forms. One has to say that because, after all, the UK has youth mobility agreements with a number of other countries around the world already, so there can be no objection of principle to another such agreement. It all depends on the terms and the degree of control. If we are ever asked to judge whether a youth mobility agreement with the EU is sensible, I would look at four criteria.

First, what are the numbers? They are crucial. We all know that there is a huge debate about the number of migrants coming into the country. I will not get into that, but in that context some numbers in a youth mobility scheme would not be material and some definitely would. All our existing agreements have numbers below a cap of 10,000 per year, with the exception of Australia. That is the order of magnitude that we would have to think about in an EU arrangement. The EU’s proposal for such an agreement includes no cap at all; it is simply a criteria-based arrangement under which, in principle, many tens of millions of people would probably be allowed to come to this country. Maybe they would not—I am confident they would not—but it takes only a small proportion to cause a difficulty. Numbers and a cap are really important.

The second criterion is fairness and balance. One has to laugh slightly at the nature of the EU’s proposal to us for such a scheme, which is so wildly unbalanced and tilted in its direction that it cannot think we would give it any serious consideration. Can it really be fair that everybody who meets the criteria in the entire European Union is allowed to come to the UK but that UK citizens are allowed to go to only one of the 27 EU countries? It makes no sense for the EU to say both “We can negotiate this only at EU level, because that is the way we do things” and “You can come to only one of our 27 countries, because that is also the way we do things”. We cannot have that. It makes no sense. If it is a UK-EU agreement, it would have to be done on that basis.

Thirdly, there can be no importing of EU concepts, by which I mean non-discrimination between UK and EU citizens. It is a big ask in the EU’s recommendation that we should accept that EU visitors under the scheme should not have to pay the NHS surcharge, for example, and that students should not have to pay the same fees as other foreign students. That too is not acceptable in such an arrangement. There should be and is a distinction, which we should maintain, between UK citizens and non-UK citizens. I see no case for assimilating EU citizens into that category.

Fourthly and finally, we are clear that this is an EU ask, and the Government have been quite clear that it is not something that they are looking to negotiate particularly, which is good. If we end up agreeing it anyway, what will we get in exchange for making concessions to the EU? How will it come up in the negotiations? There are many things that we ought to want from the European Union in any reordered arrangement, but unfortunately the most important of those, the Northern Ireland arrangements, are already off limits for the time being—more is the pity.

However, there are acceptable trades for this. The most obvious area is mobility; one can imagine a high-equilibrium arrangement, with some sort of youth mobility agreement in return for some sort of relaxation of the ESTA-type arrangements, better use of eGates, more pragmatic arrangements for service providers, including tourists, artists and so on. One can see we could find an equilibrium that could make sense and be of benefit for both sides. Whether that kind of thing is on the table, or whether the Government plan to concede more than that, we just do not know; we will have to wait and see.

To conclude, I set out these four tests for youth mobility. To be honest, I find it hard, in practice, to imagine that it is possible at the moment to negotiate a youth mobility scheme that would match all four of those things, but you never know. It is wise for the Government to have said they have no plans for such a scheme and it is probably best to stick to that, unless a really good offer is made to us.

Economic Growth

Lord Frost Excerpts

Thursday 23rd January 2025 Lords Chamber

[Lord Frost (Con)]

My Lords, before looking at what we have to do to get growth back, perhaps we should consider where we are and why we are here—not just in this country but across the West. We are in a very difficult position. As has already been noted by the noble Lord, Lord Agnew, GDP is falling. GDP per head, which is the only thing that matters, has begun to fall again. It is at the same level that it was in 2019. It is no wonder that people in this country do not feel better off; they are not better off.

This is not just in this country; it is common across the West. If you compare the pre-financial crash growth figures to the post-financial crash figures, only America and Australia have maintained even half their growth rates. Most of the Europeans are down 20% or 25% on their previous levels. Famously, Tolstoy wrote in the beginning of Anna Karenina:

“All happy families are alike; each unhappy family is unhappy in its own way”.


The same is true of most western economies; we all face different sets of problems. The specifics are different, but I do think we are all facing a variant of the same very deep-seated set of problems that we have to be honest about and grapple with.

First, the end of the Cold War—I think we have to go back that far—removed the pressure to remain productive and constantly demonstrate superiority of the western free-market model, and we got complacent. Secondly, what happened is what always happens when there is no counter pressure: collectivism. Intellectually bad ideas started to set in and go down the path of least resistance.

Thirdly, we saw economic policy follow that intellectual trend, with an expansion of government, more regulation and more state intervention. All that inevitably led to worse economic outcomes, more social conflict and a political environment that got worse. In the end, political choice accommodated itself to this environment. Most western electors faced the choice between two different versions of international progressivism and social liberalism—one supposedly on the right, involving international economic institutions, trade liberalisation and international business, and one conventionally on the left, involving redistribution and a lot of “woke” politics. Neither aspired to change the fundamentals; both involved high levels of migration, weakening social bonds and the nation state still further.

This system now has its own internal dynamism, and it looks very difficult to break out of it. The result is what we are seeing—the collapse in growth and zero-sum conditions. The economy is ceasing to grow, we cannot afford things that we have got used to having, social conflict is growing and crisis is near. Doing more of the same is not going to help—it will just make things worse. We have to face this reality and we need to do two very difficult things. First, we must make a huge attempt, much bigger than anything that is being contemplated at the moment, to reverse the trend of economic collectivisation and regulation from the past 30 years. There needs to be a determined attempt to end deficit financing; shrink state and taxation; recreate incentives; reverse the net-zero policy and produce cheap and more abundant energy; remove the vast corpuses of legislative regulation that dominate economic activity; intensify competition in the economy; sort out public services; conduct painful reductions in welfare transfer programmes; and look at investment in infrastructure, housing and so on, in many places.

However, it is not only this. As my noble friend Lord Farmer has set out, we need to look at the social environment too. We need to make a major effort to repair the sinews of social fragmentation, to reconnect and rebuild politics by consent. If we cannot do this, we will never get the consent for the economic changes that are necessary. Here we are going with the flow of electorates; there is a greater emphasis on culture, the nation and social conservatism. We need to go with that, which means cutting migration, controlling borders, getting an effective Government, getting out of the web of binding international agreements, killing off wokeness, getting serious about defence and thinking of investing in the family much more.

We need to do both those things, which requires making a series of correct choices, many of which are going to be unpopular—but it still has to be done. I finish by quoting the great man Sir John Hoskyns, who was behind the Stepping Stones report in the late 1970s. He said:

“It is not enough to settle for policies which cannot save us, on the grounds that they are the only ones which are politically possible or administratively convenient”.


We have to do better than that. The British people want better than that—they know something is going wrong—and it is for us, the politicians, to provide it.

Live Events Ticketing: Resale and Pricing Practices

Lord Frost Excerpts

Thursday 16th January 2025 Lords Chamber

[Baroness Twycross (Lab)]

Absolutely. I mentioned in a previous response that there was a successful prosecution relatively recently. Without prosecutions, without teeth and without action, all the work by Members of this House, including my noble friend and others who have been campaigning for years to address these issues, will have been in vain. I am clear, as my noble friend indicates, that this needs to lead to clear action.

[Lord Frost (Con)]

My Lords, I am going to break the cosy consensus here. The Conservative Party always used to be, and perhaps still is, the party of markets and economic freedom, so I am going to say what I think a lot of Conservatives might still think, which is, I am afraid, that this is a silly idea and the price of a sporting event or a Taylor Swift concert is nothing to do with the Government and can safely be left to the market. Does the Minister agree—I suspect she does not, but I will ask her anyway—that the best way of avoiding the problems we have been discussing is to deregulate, legitimise secondary markets and allow individuals who want to participate in cultural events to decide how much they want to pay for them and get access to them accordingly?