How should the UK respond to the global energy crisis?

[0:00] Paddy, you're wearing a rather lovely tie. [0:02] I put a tie on because Kemi Bainock came into the studio [0:05] and you're always very well dressed [0:07] and I thought I should, for a party leader, [0:10] I should dress up. [0:11] Oh. [0:12] Now, I've had spies who watched your programme [0:14] tell me that you've stolen one of my questions [0:17] and put it to the leader of the opposition. [0:19] Like a terrible magpie. [0:21] Let's have a listen. [0:22] Who would you support? [0:22] So Liz Truss paid everybody's energy bill [0:24] when there was the last energy shock around the war in Ukraine, [0:27] costing tens of billions to the taxpayer. [0:29] Who would get support if you were in charge? [0:31] So I'm rejecting the premise of the question. [0:33] I did. [0:36] It's a shiny... [0:36] Well, it's a great phrase you use all the time. [0:38] I use it about you. [0:39] The argument is shifting this time, isn't it? [0:41] You've raised this. [0:42] I think there's going to be targeted. [0:44] It's not going to be blanket, isn't it? [0:45] Correct. [0:46] And we've been talking about that actually for ages, [0:47] for about three weeks since this first reared its head, [0:49] the whole question of the war in the Middle East [0:52] leading to a big increase in the price of oil, [0:55] which sooner or later, sadly, [0:58] the reality is it's probably going to, [1:00] lead to much higher energy bills for people here at home. [1:02] So the political debate in this country [1:04] is rather hot and heavy around what to do [1:08] about the cost of energy, [1:09] how to produce it, [1:10] where it should come from [1:11] and whether or not this country [1:12] would ever be able to produce enough of its own. [1:15] Welcome to Sunday's Newscast. [1:24] Hello, it's Paddy in the studio. [1:25] It's Laura in the studio. [1:26] And hello, it's Henry at home. [1:27] Now, before we get stuck in to the debate about energy, [1:30] which is getting quite hot and fractious, [1:33] I think, in Westminster, [1:35] or it certainly was on... [1:37] on the TV this morning, [1:38] we wanted to say thank you very much for all your messages [1:41] about our exclusive interview yesterday [1:42] with Josh Simons, the government minister, [1:44] who had to quit. [1:46] He said, having been naive, [1:49] when he did what appears now to have been a very strange thing, [1:53] when he was the head of a think tank, [1:54] he asked a lobbying firm to look into the origins [1:57] of a news story about the think tank he worked at, [2:00] having failed to declare financial donations properly. [2:06] So, Paul Holder, [2:07] Mr Holden was mentioned. [2:08] His response to the interview is that his reporting on Labour Together [2:12] and Morgan McSweeney was entirely factually accurate [2:14] and in the public interest. [2:16] Paul Holden was one of the people who had had information [2:18] that led to the reporting about these undeclared donations. [2:22] He said that the firm was hired to undermine his reporting. [2:26] As you said yesterday, Mr Holden believes APCO, [2:29] which were the lobbying firm, [2:31] were hired to investigate me in order to produce materials [2:34] that would proactively undermine my facts, [2:37] to the accurate public interest reporting. [2:40] Simons may claim he never intended for APCO to investigate me, [2:44] but he did refer it on to others after receiving it. [2:47] Yes. [2:48] Also, we've never seen any evidence at the BBC [2:51] that the reporting came from a hack of the Electoral Commission. [2:56] So that's all post the story starting. [2:59] But when it started, it still boiled down to two or three central facts, [3:04] which remain on the public record. [3:06] Henry can help me out here. [3:08] Labour Together had a massive undeclared £730,000 [3:13] and that was how the story started. [3:16] Exactly right. [3:17] But it was a big story just in and of itself [3:19] to discover sometime before Labour's, at that point, [3:25] correctly seen as inevitable move into government [3:29] that a man at the heart of it, Morgan McSweeney, [3:31] had run an organisation which had received undeclared donations. [3:34] I mean, that was the big story. [3:36] That began all this, but clearly it spiralled in various different directions, [3:40] including for Josh Simons' career. [3:42] But I think we should also say it was really interesting, I thought, [3:44] to hear Simons talk about not just what had happened [3:47] and his regrets and feeling naive, [3:49] but also to talk about what he had done when he was working at Meta [3:52] because the issue of social media addiction, [3:55] which was found to be something that exists by an American court this week, [3:59] was something that he claimed warned about [4:03] when he was working for one of the big tech platforms. [4:05] So it's really interesting. [4:06] And it's still in your feeds if you want to go back and have a listen. [4:09] So, Henry, we go to the appearance of the leader of the opposition, [4:13] Kemi Badenoch, on Laura's television and on Radio 4 and other places, [4:18] saying, drill, baby, drill. [4:20] Which is now her well-established position, [4:21] but I think we should not just walk past how significant it is [4:26] that we have, and have had for a bit of time, [4:29] but this crisis is making it clearer than ever, [4:32] such a clear disagreement across the political spectrum, [4:35] including between Labour and the Conservatives, [4:38] on energy policy in a way which we didn't have for quite some time. [4:42] I mean, there's an argument, perhaps it's an oversimple argument, [4:46] but there's an argument that essentially the Conservative governments [4:49] more or less continued the policy established by Ed Miliband [4:53] when he was Energy Secretary the first time round under Gordon Brown [4:56] when they were in government. [4:57] And, of course, it was Theresa May who legislated [4:59] for the government to hit net zero by 2050, [5:03] something that the Conservatives still support, [5:05] net zero, that is. [5:06] However, there is clearly much more daylight [5:10] between Labour and the Conservatives, [5:12] and then also, of course, the other parties [5:14] which make up our multi-party politics on energy policy [5:17] than there has been for a very long time. [5:20] And I think this crisis is drawing that in very stark detail. [5:24] I think it is, and I also think this is going to be [5:26] the tramlines of a very, very major argument [5:29] that's going to go on at Westminster for months and months [5:31] and months and months, I think, [5:32] because if you think about the context [5:33] of what's happening in the war, it seems clear, [5:35] even if it were to end tomorrow, [5:37] there's going to be an impact on energy production [5:39] for quite some time. [5:40] And therefore, I think politicians are going to keep coming back to this, [5:43] partly because it's interesting, Henry, as you say, [5:45] that they don't agree. [5:46] So there's a kind of intense clash that's interesting to unpick, [5:49] but also because this is such an issue in people's everyday lives, [5:53] and not all the political Barneys that there are [5:55] actually have that truth at the heart of it. [5:58] Everybody's got to pay their energy bill one way or another. [6:01] Everybody is worried if energy prices go up, [6:04] and it could be something, [6:05] something that happens in a very big way. [6:08] And that's even before we start talking about, [6:10] you know, jobs in the North Sea or jobs in renewable industries. [6:14] And you've got one of the challenger parties, [6:15] if you want to call them that, [6:16] way ahead in the polls, Reform, [6:19] wanting to make this a huge issue, too. [6:20] They've been trying to make it a big issue for ages. [6:24] And of course, who's the other challenger, [6:25] big entrant to politics at the moment? [6:28] The Greens. [6:29] They want it to be a big issue as well. [6:30] So you've got the war. [6:32] You've got the reality of high energy bills [6:35] for, [6:35] you know, millions of ordinary people coming down the track. [6:38] And you've also got the two challengers [6:40] at either side of the political spectrum, [6:42] both wanting to make this an issue. [6:44] So if you put that all together, [6:46] you get a big fat argument. [6:48] And this is what Kemi Badenoch was saying this morning. [6:50] Drill, baby, drill. [6:51] Is that your message? [6:52] Yes, absolutely. [6:53] I do think that we need to drill our own oil and gas [6:56] in the North Sea. [6:57] We are importing 40% of our gas from Norway, [7:01] who are drilling in the very same basin. [7:03] We're importing oil from places [7:05] much further afield, dirtier oil, [7:08] rather than doing it more cleanly at home. [7:11] We're losing so many jobs, about 1,000 jobs a month [7:15] being lost in the North Sea oil industry, [7:17] particularly impacting Scotland, but the whole country. [7:20] And this is terrible for our financial security, [7:23] for our energy security. [7:24] We should drill our own oil and gas. [7:26] Because Claire Coutinho, your shadow secretary for energy, [7:29] said on BBC Breakfast it wouldn't necessarily [7:31] bring energy down, energy bills down. [7:34] Can you tell our listeners, [7:35] would you be able to bring down their bills [7:38] by drilling, baby, drilling? [7:40] So indirectly, yes. [7:43] We already have a cheaper- [7:43] But directly, the answer- [7:44] We actually have a plan to bring down bills, [7:47] the cheap power plan. [7:49] What you do is you get the taxes from it [7:51] you can use to subsidise bills, [7:52] which is what the government is doing. [7:54] So saying no to tax revenue from oil and gas [7:56] doesn't make any sense. [7:57] And we also have a separate plan to scrap the green taxes [8:01] on household bills, save about 160 pounds. [8:05] Last time I looked at the calculations. [8:07] You can do this. [8:09] Saying no to North Sea oil and gas [8:11] means more people losing their jobs. [8:13] Your shadow energy secretary, Claire Coutinho, [8:15] who was with us a couple of weeks ago, [8:18] she said on the record, [8:20] it wouldn't necessarily save very much money. [8:23] She said that when she was in government. [8:25] Directly, directly, but indirectly, yes it does. [8:28] Because you can use the money from there to subsidise. [8:31] But more importantly, jobs are disappearing. [8:33] We are losing about a thousand jobs. [8:35] A month in the North Sea oil and gas industry. [8:38] This is very bad for Scotland in particular. [8:40] We're not getting the tax revenue. [8:42] The government is not sloshing around with money [8:44] at spending loads on benefits. [8:46] Let's use the oil and gas that we have. [8:49] But I just want to stick on that point [8:50] because you're trying to make a big deal of this [8:52] in political campaigning at the moment. [8:53] But you've just said there that it might not help people [8:57] directly with their bills, but you're presenting this [9:00] as if it is a solution to people's fears about their bills. [9:04] Because it is. Because it requires the government [9:05] to make the link. [9:06] It requires the government. [9:07] The drilling isn't going to go directly onto people's bills, no. [9:10] But if we can make sure that we stop importing from Norway, [9:14] 40% of our imports are coming from Norway, [9:16] who are drilling in the same basin. [9:18] Why are we importing gas that is being drilled in that basin, [9:20] but we won't drill our own? [9:22] Gosh, we're a bossy pair, aren't we? [9:23] Henry, the policy difference is where you want us to look. [9:27] It may not be quite clear how soon the Conservatives [9:30] can get any gas out of the basin or what it'll do to bills. [9:34] But you're telling us [9:35] look how the parties now have a chasm between them on this matter. [9:39] Well, what's quite interesting, I think, is that actually both Labour [9:42] and the Conservatives' core argument is that each other [9:45] is being unnecessarily ideological. [9:49] So if you take Kenny Badenoch's argument, [9:52] it is that the government, the Labour Party, [9:54] are putting green ideology before the willingness [10:01] to do whatever that they possibly can to potentially bring bills [10:05] down, even indirectly. [10:06] As she acknowledged there, she is arguing that, of course, [10:10] you ought to deploy all the resources that are potentially [10:13] at your disposal in a moment of crisis such as this. [10:17] The argument of the government is that, given Kenny Badenoch [10:22] acknowledges that this would not have a direct impact on bills, [10:25] she is being ideological in her determination to drill, [10:30] rather than acknowledging the energy security benefits, [10:33] which come from, [10:36] clean power and renewable power. [10:39] So I think that is kind of the core of the debate here. [10:42] I mean, it's clear that it is, by the way, [10:44] it seems pretty clear at this point. [10:46] I mean, let's see how bad the crisis gets. [10:48] But it seems pretty clear. [10:49] This is a debate which is not going to be resolved [10:51] this side of general election in Kenny Badenoch's favour, [10:54] which is to say I think the government has committed. [10:57] I think perhaps we discussed this last week. [10:59] There was a moment not so long ago when there was a bit of a wobble [11:03] in government about the energy policy of Ed Miliband, which is the [11:06] energy policy of this government but that has been resolved in Ed Miliband's favour and I do [11:11] I do not think this government is going to grant new licenses for drilling in the North Sea which [11:16] after all is what they committed to in the general election campaign where they won the general [11:20] election. It's interesting though I thought there was a slightly tonal difference between what [11:25] Bridget Philipson said and what Ed Miliband would so just just a tiny hint of degree in her kind of [11:31] enthusiasm for saying well of course the North Sea is still important which yes Ed Miliband would [11:35] also say yes the North Sea is still important and it will be for some time but I did just think [11:39] there was a tiny difference in her attitude to that. What's also true step out of the big political [11:46] fandango for a while is that if you talk to lots of experts in this industry or people in the [11:51] business like the boss of Centrica one of the biggest energy companies in the world who told [11:57] us last week yes this is a moment to go full steam ahead on renewables but yes it's also a moment to [12:02] use everything you've got so [12:05] you've got to go full steam ahead on renewables but yes it's also a moment to use everything you've got so [12:05] you've got to go full steam ahead on renewables but yes it's also a moment to use everything you've got so [12:05] the parties are being ideological but actually at a time like this maybe some experts say actually [12:12] you should crack on with it all. What we were also trying to push Bridget Philipson on this [12:16] morning is the state of the government's emergency planning. Now we do not newscasters want to panic [12:23] anyone at all. It's important to know people like the AA, the RAC say there are no shortages at the [12:28] moment. This is you can go about your business as normal you shouldn't be like rushing to the [12:33] forecourt to go and fill up. However you've got reputable [12:36] big names like ASDA and the boss of BP saying there could be shortages. So we [12:44] were trying to press Bridget Philipson on what the government would do in that [12:46] case. She was incredibly tight-lipped but this is what she had to say about the [12:53] people who'd get help if there's a big rise in bills later in the year. So you [12:57] would expect that this government and any government would plan for [13:00] eventualities where events happen in the world. That's not unique to this situation but I [13:05] think it is important that we reassure people that what you've just described is not the situation [13:11] that we face. That is really really important that we do that but alongside it we will always [13:15] exactly because it's important and we shouldn't engage in scaring people but alongside that we [13:22] will of course always act to protect not just the British national interest but British consumers [13:26] here at home. You'll see that in the approach that we've taken around energy bills. Lots of measures [13:31] that are coming in from next week that are going to make a big difference to people. I know that [13:35] the living pressures that families are experiencing are still tough and that's why the lifting of the [13:40] awful two child limit takes effect. That will put money back into people's pockets. All of the [13:45] measures that we're bringing in around that I'm introducing around free breakfast clubs, expanding [13:50] free school meals, the fact that energy costs will continue to be capped, that should all provide [13:55] reassurance to the public that we as a government are on the side of the public. We will do what is [14:00] necessary to make sure that people are supported whatever happens but we do want to see a [14:05] de-escalation [14:05] of the conflict. That is the route to more stability here at home but also across the world [14:11] and of course that is why it is right that Keir Starmer has taken the approach that he has which [14:16] is in line with our values and our national interest. I mean look I think this is a another [14:21] week where we've had government ministers on your programmes kind of acknowledging sometimes [14:27] implicitly sometimes explicitly that they have no real influence over the trajectory of a conflict [14:35] which is [14:36] turning into a global crisis including for the UK and I think that's a very uneasy obviously [14:42] position for government ministers to find themselves in. There is all sorts of planning [14:47] going on we're told in the Treasury in particular about what they would do and what the government [14:54] might have to do in different scenarios but often when parts of government are contingency planning [15:01] for different scenarios they have some ability to shape what scenario transpires and I think that's a good thing. [15:05] I think that's absolutely right and while Keir Starmer thinks he might be getting some [15:18] political credit for staying out of the war in its offensive nature as not being a close [15:28] ally marching alongside the US metaphorically that means he's got not very much influence over what [15:36] happens next so that ends them that means we're in that kind of position where our politicians here [15:43] are arguing about the consequences of the conflict in the Middle East they're not arguing about what [15:48] should actually happen next when it comes to the consequences of the conflict in the Middle East. [15:52] We had Aziah Youssef reformed spokesperson for Home Affairs this morning on the programme too. [15:58] Their policy is to get rid of VAT on energy bills and also they like the Conservatives would not [16:05] raise fuel duty. [16:06] Which is projected to grow up in September. [16:09] And then let's talk about the Greens. [16:12] Zach Polanski wants a hike in taxes on capital gains and a tightening of an existing tax on [16:19] energy firm profits to support houses if energy bills went up. [16:24] So back to your point Henry we're seeing this I mean we've always said it's the NHS the NHS the [16:30] NHS if you want to understand British politics but actually do I take your lead and say [16:36] energy energy energy yeah I think I think that's absolutely right because also energy is right now [16:43] the policy I mean any energy in and of itself is perhaps a fairly sort of niche issue or has [16:50] typically been seen as that probably wrongly by British politics but energy now is the cost of [16:54] living and energy is the economy I mean I think we've said this before as well um and I'm sorry [17:00] we're repeating ourselves but I suspect or I'm repeating myself but I suspect I will again and [17:04] again because uh this is likely to be the story of the coming week. [17:07] weeks and months Keir Starmer at the start of this year wanted to talk relentlessly about the cost [17:13] of living now that wasn't just because he was told by focus groups and so on that that was the voters [17:20] first priority and first in their minds it's also because the government was beginning to dare to [17:26] hope that the cost of living would start to improve uh in 2026 and I think you can't overdo what a [17:34] blow it is for the government that they now find themselves talking about the cost of living but [17:37] not because it is starting to turn a corner but because uh it is their fear and probably the [17:44] reality that there's going to be a rocky period ahead for many people as a result of what is going [17:49] on in the Middle East. And the Lib Dems of course have got a plan for this too because we're talking [17:53] at a time when the elections are fast approaching all around the country Scotland Wales and lots of [18:00] councils in England uh Davey for the Lib Dem says that the government should be uh really generous [18:08] he said there needs to be some targeting of help for energy bills but there are lots of people on [18:12] low and middle incomes who just wouldn't be able to afford a big increase in bills reminding us [18:18] there that the government has hinted so far that people who have who rely on benefits will be those [18:24] to get help with energy bills they haven't yet been forthcoming about people who don't live on [18:29] benefits they don't need benefits but they just might really struggle with a huge increase in [18:34] energy but the Lib Dems say that there should be more support than the government is already promising [18:38] and that's interesting because that's about my household your household the newscasters household [18:42] bills but I was reading in the weekend papers there's another bill which is the government [18:48] debt and not only that it's Rachel Reeves's headroom if she's got to pay more for government [18:55] borrowing and if she's got to pay some million people's gas bills not all million people's gas [19:01] bill then the big part of her budget which was she was protecting as headroom is halved [19:08] or evaporates so Henry it's all connected to Rachel Reeves's position as Chancellor yeah [19:15] absolutely and you know who knows where the conversation will be by the time she delivers [19:19] her next budget in the autumn if indeed she does deliver her next budget in the autumn because you [19:26] do encounter the occasional politician in the Labour Party including quite senior people [19:33] government ministers and so on who wonder whether after the local elections Keir Starmer might change [19:37] his Chancellor but just assume that it's Rachel Reeves [19:39] um yeah I mean I'm sure she is already uh worrying fretting about what the implications of this will [19:46] be for her budget I think that's one reason why last week or is it still just about this week [19:51] Rachel Reeves um sort of set out in advance the principles that she would apply to any uh bailout [20:00] of households uh when they come to pay their energy bills and make clear that it would be [20:04] targeted uh in a fairly limited way um I think that is [20:09] you know that is that will go down fine with late that did go down fine with Labour MPs uh and I'm [20:16] sure many uh voters will instinctively be in the same place until she then identifies as and when [20:23] the time comes what the threshold actually is and you know this government like others has learned [20:29] that when you apply a threshold um there are lots of boundary cases that fall on the wrong side of [20:35] the boundary where people think they should be on the other side and I think that will be a [20:39] big political Divide and a big political argument if and when the moment for that bailout comes and [20:45] don't forget Keir Starmer has not got a great track record for being able to stick to things that he [20:50] tells his party he needs to do if they are unpopular and if we get to the autumn and your [20:56] average Joe's energy bill is likely to go up by 500 quid for example as some estimates suggest it [21:02] might do the idea that a Labour Chancellor and an unpopular Labour government is going to say to [21:07] most people sorry we're not going to help you [21:09] at all that seems very very politically challenging but we will see and it's a long way off I mean we [21:15] know in 2024 when of course the Conservatives lost office here there were all sorts of incumbent [21:19] governments around the world in that period of inflation which had followed Russia's full-scale [21:24] invasion of Ukraine who also lost election lost re-election and you know that is certainly one [21:32] of the many anxieties throbbing in the minds of people in the government here and I don't want to [21:37] be stealing America [21:39] last Thunder but Donald Trump was elected in part on the promise to give two dollar gasoline [21:46] and it's already above three anyway three and a half I think so you've got a situation where the [21:53] pump in the United States is really going to be having a massive influence and it's been said [21:59] bluntly that that's why he's been posting to uh bring the oil price down he wants to get it down [22:06] but he hasn't got control of the straight hall moves [22:09] so it goes back up again after he's posted to make it go down again that is the world that we live in [22:13] now how do you think about my audition there for AmeriCast do you think that was it was good up again [22:18] down again is that is that going to get me on AmeriCast uh I think they might get back to you [22:22] that sounds like no to me uh Henry do we have anything to look forward to in the world uh I [22:30] mean look forward to sounds positive and the answer to that is probably no I mean this week uh Parliament is in uh recess but uh I I think it's going to come back in the fall I'm looking forward to it on the Odyssey it's probably not that last week then are we in recess with government δcipher that gets us both outside butzi but I think we have something that is still up in there that is going to happen the other day it goes to [22:39] think the Labour Party is launching its local elections campaign. Well, I mean, it's obviously [22:45] local elections in England, but also national elections in Scotland and Wales. And we have [22:51] talked for so long about what a crucial set of elections these are for Sir Keir Starmer. [22:56] I think they are made very slightly less crucial by the international situation, putting them [23:02] into perspective and also giving Sir Keir Starmer an opportunity to display leadership [23:08] on the global stage, which he believes he's done and his team believe has gone down pretty [23:13] well with the country and his party. But nevertheless, it will be fascinating to see [23:18] what arguments the Labour Party does make in the run-up to those elections to try to, [23:24] at the very least, alleviate what even they believe are going to be some pretty stinging losses. [23:31] Quite so. And we will have to look back and see if they use the same arguments and wheel [23:35] them out again that they used the morning after the May elections in 2025. [23:38] So we will see. [23:39] Do you think we should have a ban on the word crucial election? [23:42] Yeah. [23:42] Should we get a journalistic sort of bell every time someone says this is a key set of elections? [23:49] Yes, or key targets. A target is a target. You don't have to say a key target. It's either a [23:54] target or it's not a target. [23:55] I think it's always useful, and I'm not the expert that you two are. The public are the boss. The [24:01] public's the boss. And every now and again, it comes up and it's linked for me. The pressure [24:06] from my bills times 60 million. [24:08] Yeah, that's the most exciting moment. And then it goes, the power for those 24 hours is in the [24:24] ether. It goes over to the public and then they hand it back to the politicians, sometimes with [24:28] two fingers on it. So exciting. And I'm already getting quite excited. I might start listening to [24:32] the election theme music because I'm sad like that. But yeah, we'll have tons of coverage of [24:37] that, of Mega May, which, Henry, you correctly mentioned. [24:38] Corrected yourself before I needed to tell you off. There are local elections in England and very [24:42] important national elections in Scotland and in Wales. So if you hear anybody saying they're local [24:47] elections, that's not all they are. [24:49] I can tell it's time for us to say goodbye. Thank you very much for listening and watching. Goodbye. [24:56] Goodbye. [24:58] Goodbye.