Taxation (Energy and Vehicles) Bill

Lord Altrincham Excerpts

2nd reading & Committee negatived & 3rd reading
Tuesday 14th July 2026 Lords Chamber

[Lord Altrincham (Con)]

My Lords, I thank all noble Lords who have spoken in this debate and the Minister for his usual courtesy in hosting it and for his explanation of the rather undefined windfall tax that my noble friend talked about. In particular, I note the lively contributions of my noble friend Lord Fuller and the noble Lord, Lord Sikka, who both touched on the fraught areas of contracts for difference and high wind—perhaps the Minister could comment on that.

As we have discussed, the Bill contains some small and mainly useful welcome measures. The Government’s recognition that more must be done to support small businesses is also a step in the right direction. However, the difficulty we see is that, while such measures may have a place as emergency, short-term relief, as the previous Government recognised, they cannot form the basis of a sustainable, long-term economic strategy.

More widely, noble Lords will be aware that the interim report of the Timms review of disability benefits spending was published last week, and it showed that spending is forecast by the Department for Work and Pensions to rise to more than £41 billion by 2031 on that benefit alone. As my noble friend and other noble Lords have made clear, the Office for Budget Responsibility has warned that taxes will have to rise or spending will have to be cut if we are to avoid an unsustainable path for debt. The tax rises that this Government have already imposed are themselves becoming unsustainable: they are penalising businesses, tourists, publicans, workers and those who want to come to this country to generate wealth, investment and employment.

A more sensible approach would be to take steps to increase domestic energy supply from the North Sea, to support growth and to ensure that any tax reliefs are matched by credible reductions in spending. The Government’s net-zero approach has weakened our domestic energy industry and left us increasingly dependent on global supplies, including from countries that continue to support Russian oil. In the latest round of sanctions, the Government left open a loophole for Russian oil that is refined into diesel and jet fuel in third countries. Indeed, we are now in the extraordinary position of relying on adversaries, and on global supply chains shaped by them, to meet demand that we could and should meet through domestic energy production. That is bad for our economy and has led to a degree of industrial collapse, as noted by my noble friend Lord Redwood. It is bad for our energy security and our standing in the world.

What we need from this Government is a serious plan to address the underlying problem. Spending must be brought under control—and quickly—if we are to keep public finances within the bounds of sustainability. Welfare would seem an obvious place to start, but any new Government will need the political courage, discipline and authority to deliver reform at the scale required. The wider economic challenge facing the Government will become only more serious if this is the approach that the new Administration, under the incoming Prime Minister, take to the economy, energy security and fiscal policy.