British Steel
Viscount Hailsham Excerpts(2 weeks, 1 day ago)
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Viscount Hailsham (Con)
My Lords, given that high energy costs and the increased national insurance contributions on employers are threatening the viability of British manufacturing industries, most especially steel-making, what do the Government propose to do about these additional costs?
Baroness Gustafsson (Lab)
Energy costs are high in the UK—I see that and regularly hear conversations about that, not just in this sector but in many industries manufacturing across the UK. The Government are already taking particular action on the UK’s high industrial energy costs, which are the highest in Europe and four times those in the United States and which have doubled in recent years.
The British industry supercharger package will bring electricity costs down significantly once fully implemented from April 2025, ensuring that energy-intensive industries such as steel are shielded from future policy costs that would have a significant impact on their electricity costs. To be clear, things such as the net-zero transition are not causing this challenge; the challenge is securing the clean energy that we need to end our reliance on the overseas oil and gas market. Indeed, UK Steel, the trade body for the steel industry, has said that it is
“the UK’s reliance on natural gas power generation”
that leaves us with higher prices than our international allies; it is not too much clean energy but too little.
Baroness Gustafsson (Lab)
I confirm exactly that: energy is going to be such an important growth driver across all our sectors, and a key one that we are talking about today is the steel strategy. For us to grow a sustainable and powerful industry within the UK, we need a sustainable and powerful source of energy that is generated here and that we can rely on. That is why the two go hand in hand.
Viscount Hailsham (Con)
I press the Minister further on the impact of the increase in employers’ national insurance contributions. What is the Government’s assessment of the impact of those increases on steelmaking?
Baroness Gustafsson (Lab)
I would be more than happy to follow up specifically in that regard.
Budget: Taxes and Borrowing
Viscount Hailsham Excerpts(6 months ago)
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Lord Livermore (Lab)
The noble Baroness is absolutely correct: we had to take some very difficult decisions on tax. We have acknowledged that the impacts of those measures will be felt beyond business. We have chosen to compensate the public sector with £5.1 billion, to ensure that there is sufficient funding to support our vital public services, including the NHS. On social care, the Government have provided a significant funding top-up to local government, which can be used for pressures, including adult social care.
Viscount Hailsham (Con)
My Lords, the Minister will know that the OBR has forecast that growth will peak at 2% in 2025 and thereafter fall back, after 2026, to around 1.5%. Does the Minister regard that as a satisfactory outcome of a Budget that imposed £40 million in taxes?
Lord Livermore (Lab)
It was £40 billion in taxes. The noble Viscount is right that growth was one of the biggest failures of the previous Government, and we are absolutely determined to turn that around. We cannot undo the damage of the past 14 years in just one Budget. The OBR has said that growth is largely unchanged over the Parliament; that is in the context of a Budget with some very difficult decisions on tax to clear up the mess that we inherited. Of course, we need to go further and we need to go faster. That is why we are doing planning reform, pension reform and skills reform, all of which will boost growth and none of which is included in the OBR’s forecast. Let us remember that, under the previous Government, we were the only G7 country with investment below 20% of GDP. Our growth rate was dismal by OECD standards. Their Brexit deal imposed new trade barriers on business equivalent to a 13% increase in tariffs for manufacturing and 20% for services. They crashed the economy, with interest rates peaking at 5.25%.