Energy Prices Bill

Committee stage
Monday 17th October 2022 Commons Chamber

Proceedings resumed (Order, this day).

Considered in Committee.

[Dame Rosie Winterton in the Chair]

Clause 1

Domestic energy price reduction schemes for Great Britain

19:31

Question proposed, That the clause stand part of the Bill.

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

With this it will be convenient to discuss the following:

Amendment 10, in clause 2, page 3, line 5, leave out “negative” and insert “affirmative”.

Clause 2 stand part.

Amendment 11, in clause 3, page 4, line 7, leave out “negative” and insert “affirmative”.

Clauses 3 to 8 stand part.

Amendment 19, in clause 9, page 8, line 3, at end insert—

‘(2A) Within two weeks of this Act coming into force the Secretary of State must make a statement to Parliament as to whether he intends to introduce regulations under subsections (1) or (2), and including any indicative reductions that will be implemented.”

This amendment would require the Government to state within two weeks of Royal Assent whether it will introduce regulations under clause 9.

Amendment 7, in clause 9, page 8, line 16, at end insert—

‘(4A) Regulations under this section must apply to non-domestic customers—

(a) that signed a fixed agreement with their energy provider after 1 December 2021, and

(b) on variable rates tariffs.”

This amendment would ensure that non-domestic customers who signed a fixed tariff agreement between 1 December 2021 and 1 April 2022 also benefit from the reduced energy charges.

Amendment 17, in clause 9, page 8, line 17, leave out “may” and insert “must”.

Amendment 18, in clause 9, page 8, line 18, after “section” insert “, and provide a report to Parliament setting out the amount of money paid to electricity and gas suppliers over the 6 month period, an estimate of how many businesses have been supported, and a business sectorial breakdown of the financial support provided.”

This amendment is to enable analysis of the cost of the scheme, the types of businesses supported, and the approximate sums paid to different business sectors.

Clauses 9 to 12 stand part.

Amendment 16, in clause 13, page 10, line 26, at end insert—

‘(1A) The Secretary of State may establish a domestic fuel reduction scheme in Great Britain for off gas grid homes heated from supplies of fossil fuels such as LPG and oil.”.

Amendment 6, in clause 13, page 10, line 37, at end insert—

‘(3A) The Secretary of State must make alternative fuel payments to non-domestic consumers of energy who are not connected to the gas or electricity grid and who will not benefit from the non-domestic energy bill relief schemes, and these payments must be at a level which provides such consumers with a cost reduction equivalent to those consumers benefiting from the non-domestic energy bill relief schemes.”.

This amendment would provide non-domestic customers that are off grid and who are not covered by the Energy Bill Relief Scheme with support which has parity with that given to other non-domestic users.

Amendment 9, in clause 13, page 10, line 37, at end insert—

‘(3A) Any payments made to energy users not connected to the gas or electricity networks must be provided direct to those users’ bank accounts.”.

This amendment would ensure that those receiving payments under the Alternative Fuel Payments schemes do so through their bank accounts rather than through their electricity bill.

Clause 13 stand part.

Amendment 12, in clause 14, page 11, line 24, leave out “as soon as reasonably practicable” and insert “within 28 days of the expenditure being incurred”.

Amendment 13, in clause 14, page 11, line 25, at end insert “; and in calculating the period of 28 days, no account is to be taken of any whole days that fall within a period during which—

(a) Parliament is dissolved or prorogued, or

(b) either House of Parliament is adjourned for more than four days.”.

Clauses 14 and 15 stand part.

Amendment 14, in clause 16, page 14, line 40, leave out “The first”.

Amendment 15, in clause 16, page 14, line 41, leave out “any other regulations under this section are subject to the negative procedure”.

Clause 16 stand part.

Amendment 8, in clause 17, page 15, line 24, at end insert—

‘(2A) The Secretary of State must place any information received in response to a direction under subsection (1) in the Library of the House of Commons.”.

This amendment would require the Secretary of State to place in the Commons Library the responses to any direction to an electricity generator to provide information under the power in clause 17(1).

Clauses 17 and 18 stand part.

Amendment 4, in clause 19, page 16, line 37, at end insert—

‘(1A) Regulations under subsection (1) must provide that the pass-through requirements on intermediaries are in force until at least 30 September 2024.”.

This amendment would ensure that the requirement on intermediaries to pass through to end users the benefit of Government price support will last for two years.

Clauses 19 to 26 stand part.

Amendment 1, in clause 27, page 22, line 40, at end insert—

“(c) anything done or proposed to be done to prevent electricity generators and oil and gas producers from passing on the costs of any levy imposed on them or payments they are required to make under this Act.”.

This amendment is a power for the Secretary of State to undertake consequential actions in order to secure the full reduction in the cost of domestic or non-domestic energy bills in Great Britain.

Clauses 27 to 30 stand part.

New clause 1—Impact assessment on VAT zero rating insulation works for tenement buildings in Scotland—

‘Within six months of the date of Royal Assent to this Act, the Secretary of State must carry out an assessment of the impact of zero rating value added tax on work and materials to insulate tenement buildings in Scotland.’.

New clause 2—Marginal cost of electricity—

‘Within two years of the date of Royal Assent to this Act, the Secretary of State must consult on and implement a scheme to disaggregate the cost of production of natural gas from the cost of production of other energy sources with a view to reducing the cost of electricity to domestic and commercial consumers.’.

This new clause requires the Secretary of State to devise and implement a scheme to disaggregate the cost of production of natural gas from the cost of production of other energy sources in order to reduce the cost of electricity to domestic and commercial consumers.

New clause 3—Report on additional expenditure treated as incurred for purposes of section 1 of the Energy (Oil and Gas) Profits Levy Act 2022—

‘(1) The Secretary of State must, within six months of the date of Royal Assent to this Act, publish and lay before Parliament a report on the effect of reducing the amount of the allowance under section 2(3) of the Energy (Oil and Gas) Profits Levy Act from 80% to 5%.

(2) The Report must set out projections of the effect of the reduction set out in subsection (1) on domestic and non-domestic energy bills.’

This new clause requires the Secretary of State to produce a report assessing the impact of reducing the investment allowance for oil and gas companies as set out in the Energy (Oil and Gas) Profits Levy Act from 80% to 5%, and in particular to assess such a reduction’s impact on domestic and non-domestic bills.

New clause 4—Energy cost support for users of heat networks—

‘(1) The Secretary of State must make energy cost support payments to users of heat networks who will not benefit from the Energy Price Guarantee.

(2) These payments must be at a level which provides such users with a cost reduction equivalent to that received by those benefiting from the Energy Price Guarantee.

(3) These payments must apply from 1st October 2022 and run for two years.’

This new clause would ensure that users of heat networks will receive energy cost support for two years.

New clause 5—Report on support for business after six months—

‘Within one week of the date of Royal Assent to this Act, the Secretary of State must lay before Parliament a statement about the support that will be offered to non-domestic customers in Great Britain and Northern Ireland when the initial six-month period of support has ended.’

This new clause would require the Government to produce a report on support for business after the initial six months one week after the Bill receives Royal Assent.

New clause 6—Impact assessment of a housing decarbonisation scheme—

‘(1) Within six months of the date of Royal Assent to this Act, the Secretary of State must work with the devolved authorities to carry out an assessment of the potential impact of a housing decarbonisation scheme.

(2) The assessment must set out the different impacts of reaching the following Energy Performance Certificate (EPC) ratings—

(a) all domestic properties in the UK to EPC rating “A” by 2030;

(b) all domestic properties in the UK to EPC rating “B” by 2030;

(c) all domestic properties in the UK to EPC rating “C” by 2030.

(3) The assessment must consider the impact of a housing decarbonisation scheme under the different scenarios outlined in subsection (2) on—

(a) average domestic energy bills for households across the Wales, England, Scotland and Northern Ireland;

(b) the number of households living in fuel poverty in Wales, England, Scotland and Northern Ireland;

(c) the Welsh Government’s climate targets;

(d) the UK Government’s climate targets;

(e) the Scottish Government’s Climate Targets;

(f) the Northern Ireland Executive’s Climate Targets.

(4) The impact assessment must be co-authored by—

(a) the UK Government;

(b) the Welsh Government;

(c) the Scottish Government;

(d) the Northern Ireland Executive.

(5) A report on the findings of the impact assessment must be laid before Parliament within three months of its publication.

(6) The Secretary of State must make an oral statement to the House of Commons when any report under subsection (4) is laid.’

This new clause would require the Government to work with the devolved authorities to assess the impact of a UK-wide housing decarbonisation scheme.

New clause 7—Impact assessment of setting the Domestic Energy Price Reduction Scheme at the pre-April Ofgem cap levels—

‘(1) Within one month of the date of Royal Assent to this Act, the Secretary of State must carry out an assessment of the potential impact of using the Domestic Energy Price Reduction Scheme to set domestic energy bills for Scotland, Wales and England at the following levels—

(a) £1,277 for standard-variable tariffs;

(b) £1,309 for pre-payment meters.

(2) The Impact assessment must consider the impact of the policy set out in subsection (1) on—

(a) the number of households living in fuel poverty in Scotland, Wales and England;

(b) the number of children living in relative income poverty in Scotland, Wales and England;

(c) the number of children living in absolute income poverty in Scotland, Wales and England.’

This new clause would require the UK Government to assess the impact of using the price reduction scheme to set energy prices at the pre-April Ofgem cap levels.

New clause 8—Review of forecast and outturn revenue and profits of electricity generators and UK oil and gas producers—

‘(1) The Secretary of State shall, within one month of the passing of this Bill and every six months thereafter, publish an assessment of forecast and outturn revenue and profits of electricity generators and oil and gas producers.

(2) This review must cover all electricity generators as specified in section 16(10) of this Act and all companies carrying on a ringfenced trade as defined in Clause 1 of the Energy (Oil and Gas) Profits Levy Act 2022.

(3) This review must consider total revenue and profits from UK production and generation that are forecast in each financial year from 2022/23 until 2025/26, as well as outturn revenue and profits in these years when data becomes available.”

This new clause would require the Government to assess the revenue and profits of electricity generators and oil and gas producers every six months until 2025/26.

New clause 9—Removing regional variation from standing charges—

‘The Secretary of State must make provision to ensure that electricity standing charges are uniform throughout the country, including England, Northern Ireland, Scotland and Wales.’

This new clause would end regional variations of electricity standing charges.

New clause 10—Establishment of a domestic home heating oil voucher scheme for households in Northern Ireland—

‘(1) The Secretary of State must establish a domestic home heating oil voucher scheme for households in Northern Ireland.

(2) A “domestic home heating oil scheme for Northern Ireland” is a scheme that makes provision for making voucher payments to households in Northern Ireland to provide either 1000 litres of home heating oil, or a quantity that is substantially consistent with the support offered to domestic gas customers.’

New clause 11—Energy Profits Levy—

‘(1) The Secretary of State must lay before the House an assessment of the additional revenue that would result from the following policy measures—

(a) amending the Energy (Oil and Gas) Profits Levy so that it applies to oil and gas profits incurred since 1st October 2021,

(b) removing from the Energy (Oil and Gas) Profits Levy allowances for investment in oil and gas extraction,

(c) increasing the rate of the Energy (Oil and Gas) Profits Levy beyond its current level of 25%, and

(d) implementing a windfall tax on the excess profits of coal and gas-fired power stations.

(2) In addition the Secretary of State must lay before the House an official estimate of the oil and gas super profits over the next two years.

(3) The Secretary of State must lay the report no later than 31st October 2022.’

This new clause would require the Secretary of State to lay a report before the House detailing the impact of expanding the government’s Energy (Oil and Gas) Profits Levy.

New clause 12—Energy cost support for off-grid consumers—

‘(1) The Secretary of State must make energy cost support payments to users who are not connected to either the gas or electricity grid and who will not benefit from either the Energy Price Guarantee or Energy Bill Relief Scheme.

(2) These payments must be at a level which provides such users with a cost reduction equivalent to those benefiting from the Energy Price Guarantee.

(3) These payments must apply from 1st October 2022 and run for two years.’

This new clause would ensure those off-grid will receive energy cost support for two years.

New clause 13—Report into effectiveness of energy efficiency programmes in reducing energy costs—

‘(1) The Government must review the impact of energy efficiency programmes in reducing energy costs in accordance with this section and lay a report of that review before the House of Commons within 6 months of the passing of this Act.

(2) A review under this section must consider the impact of—

(a) the number of homes and business properties which have increased their EPC rating,

(b) the number of homes and business properties which have undergone retrofitting programmes, including—

(i) solar panels, and

(ii) replacement of gas boilers,

(c) increases in renewable energy sources, and

(d) public messaging campaigns in changing energy usage habits.’

This new clause would require the Secretary of State to report on the impact of energy efficiency programmes in reducing energy costs.

New clause 14—Fuel poverty impact analyses of provisions of this Act—

‘(1) The Chancellor of the Exchequer must lay before the House by 31st January 2023 a report assessing the impact of this Act on fuel poverty, taking into account the following two scenarios—

(a) the energy price cap being set at its current level of £2,500, and

(b) the energy price cap being set at £1,971.

(2) A review under this section must consider the impact of the provisions of the Act on—

(a) households at different levels of income,

(b) households in receipt of the Alternative Fuel Payment (that is, not connected to either gas or electricity grid),

(c) households who use heat networks, and

(d) households in rural communities.

(3) A review under this section must include a separate analysis of each separate measure in the Act, and must also consider the cumulative impact of the Act as a whole.’

This new clause would require the Secretary of State to report on the impact of the provisions of the Act on the level of fuel poverty.

New clause 15—Report into the impact of provisions in the Act on the long term viability of the green energy industry—

‘(1) The Government must review the impact of provisions in the Act on the long term viability of the green energy industry.

(2) A review under this section must consider the impact of the Act on—

(a) the likelihood of achieving net zero by 2050, and

(b) creating allowances for investment in green energy.’

This new clause would require the Secretary of State to report on the long term viability of the green energy industry.

New clause 16—Investment in renewables—

‘In exercising the powers under this Act the Secretary of State must seek to ensure that they do not disincentivise investment in renewables.’

This new clause would require the Government not to disincentivise investment in renewables when exercising the powers under this Act.

New clause 17—Calculation of energy and gas prices—

‘The Secretary of State must publish details of how the Government has determined the relative levels of the gas and electricity price reductions brought into effect under the provisions of this Act.’

This new clause would require the Government to explain how it has arrived at the electricity and gas price reductions under the Act.

Manuscript new clause 18— Energy support after April 2023—

‘(1) The Government must lay a report before the House of Commons within 28 days of Royal Assent stating what energy price support it will provide from April 2023 onwards.

(2) The report must also contain—

(a) an estimate of what average domestic energy bills are expected to be in April 2023 if no further support provided;

(b) an estimate of how many households will be classed as being in (a) fuel poverty and (b) extreme fuel poverty if no further support is provided;

(c) what the extension of the universal support scheme for a further—

(i) 6 months;

(ii) 12 months and

(iii) 18 months is estimated to cost; and

(d) what alternative support schemes the Government will introduce to prevent any further increases in fuel poverty and protect the most vulnerable including—

(i) pensioner households,

(ii) those with disabilities and

(iii) those in receipt of benefits.’

This new clause would require the Government to make a report to the House setting out the energy support it will provide from April 2023 onwards.

That schedule 1 be the First schedule to the Bill.

That schedule 2 be the Second schedule to the Bill.

That schedule 3 be the Third schedule to the Bill.

That schedule 4 be the Fourth schedule to the Bill.

That schedule 5 be the Fifth schedule to the Bill.

Amendment 2, in schedule 6, page 36, line 17, after ”may” insert

‘provide for the reduction of the amount charged for domestic electricity supply from 8 September 2022 but’.

This amendment allows the domestic electricity price reduction scheme to begin from 8September 2022.

Amendment 3, in schedule 6, page 36, line 25, after ”may” insert

‘provide for the reduction of the amount charged for domestic electricity supply from 8 September 2022 but’.

This amendment allows the domestic electricity price reduction scheme to begin from 8 September 2022.

Amendment 5, in schedule 6, page 37, line 22, leave out sub-paragraphs (1) to (4) and insert—

‘5 (1) Regulations under section 9(1) and 9(2) must provide for the reduction of charges for electricity supply and for gas supply to last for a period of two years beginning with the operative date.’.

This amendment would require the support for non-domestic electricity and gas users in Great Britain to continue for two years.

Amendment 20, in schedule 6, page 39, line 6, leave out “three years and six months” and insert “two years”.

That schedule 6 be the Sixth schedule to the Bill.

That schedule 7 be the Seventh schedule to the Bill.

[The Minister for Climate (Graham Stuart)]

We are facing a global energy crisis, which has been exacerbated by Russia’s illegal invasion of Ukraine. This Bill puts support to help people, businesses, charities and the public sector across the UK with their energy bills on a secure legislative footing. It is a vital step in delivering the necessary package of assistance for the whole of the UK. We are putting the Bill through in an expedited way, and I thank His Majesty’s Opposition and other parties for their constructive engagement with us ahead of today. It is important that I put on record what the Bill will do, but I will seek to be brief because a number of Members are keen to speak to their amendments.

Clause1, together with clauses 2 to 8, provides for the establishment in legislation of the energy price guarantee schemes in Great Britain and Northern Ireland for electricity and gas. The EPG represents significant and bold action that will help to protect families from the spiralling cost of energy. This clause provides for the establishment of the EPG schemes and for them to be amended and revoked. For example, the schemes could be amended to change the eligible tariffs or the amount of financial support provided. The GB scheme has been operational from 1 October and delivered through contracts between the Secretary of State and energy suppliers. The Bill will put the scheme on a more secure statutory footing. The House will be aware that the Chancellor’s statement intends to refine the scheme after six months.

Clauses 9 to 12 will introduce a scheme that enables the Government to reduce the charges for electricity and gas supplied by licensed electricity suppliers to eligible non-domestic customers in Great Britain and Northern Ireland. This scheme represents significant and bold action to protect all eligible non-domestic customers, including businesses, charities and the public sector, such as hospitals and schools, from excessively high energy bills over the winter period. Without this intervention, the wider negative effects of this economic pressure would be severe and would materialise very quickly.

[Jonathan Edwards]

What advice would the Minister give to manufacturing companies in my constituency that have order books that extend past the six-month period, which the Bill supports, on pricing their products, given that they will have no idea what the cost of production will be following the increase in energy prices?

[Graham Stuart]

The hon. Gentleman’s question goes to the heart of the matter, which is that, if it were not for this intervention, those businesses would have been facing very high costs. We are committed to a review after three months, which will look at those who are least able to alter their energy use and come forward with proposals to help them in due course. That is why this is so important, but because of the costs and the impact, it needs to be time limited.

Clauses 13 to 15 will introduce powers for the Secretary of State to allow the Government to take steps, including the giving of financial assistance, to respond to the energy crisis, and to designate other bodies to take action in support of such steps. The power to give financial support is a time-limited power, at three years and six months. This is essential for the delivery of the various energy price support schemes and the administrative tying-up of them at the end part.

Clauses 16 to 18 allow the Government to break the link between high gas prices and cheap low-carbon electricity. These measures will allow the Government to take decisive action, through subsequent regulations, for a payment administrator to obtain excessive revenues from low-carbon electricity generators. This temporary measure will help more fairly to reflect the cheap costs of low-carbon generation. Clause 18, which extends the contracts for difference scheme to existing low-carbon electricity generators, will grant such generators longer-term revenue certainty.

[Alan Brown]

I apologise if I missed it, but did the Minister explain clauses 13 and 14? How does he see clause 13 working in terms of giving the Secretary of State the power to spend up to £100 million on various schemes at any one time without a resolution in the House? What kind of measures does he envisage the Secretary of State entering into with such a power?

[Graham Stuart]

As the hon. Gentleman knows, this legislation lays out the remit of the Secretary of State, under the powers within the Bill, to intervene to protect businesses and consumers. That is its central aim.

Clause 19 ensures that the support schemes I have mentioned reach their intended beneficiaries. The requirement to pass on energy price support will help to ensure that tenants and other end users receive the support they need. Clause 20 will make amendments to the existing price cap legislation to support the delivery of the energy price guarantee. The clause will ensure that Ofgem continues to calculate the cap level to determine what it costs an efficient energy supplier to provide a household with gas and/or electricity. In response to the points made by the right hon. Member for Doncaster North (Edward Miliband), this will not determine the prices that households pay, but it will enable the Government to identify what level of support is needed to deliver the prices in the energy price guarantee. So it has a different purpose, but a useful one, in delivering the EPG. Finally, clauses 21 to 23 provide the power to enable the Secretary of State to modify energy licence conditions urgently, as necessary, and give directions to support the response to the energy crisis.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

I am sorry that we have such truncated time to discuss this legislation this evening, because while we have a substantial level of support for the Bill, we have our concerns about sections of it and there are parts of it that should not be in it at all. I did not have the opportunity to commend the excellent speeches on Second Reading by a number of my hon. Friends, who put into context the issues surrounding the Bill very well. I will not go over them again. I want instead to concentrate on what is in the Bill and what it will do to move towards the point that we all want to get to, which is to see the support mechanism for domestic and non-domestic customers placed into legislation and supported as well as it can be.

One of the many things that have occurred by way of recent significant U-turns is the fact that the energy price support scheme is now going to last not for two years but for six months. I appreciate that there are, shall we say, warm words behind that, and measures will subsequently be sought to concentrate help for people, but we need to be clear that this Bill is written as if the previous scheme were still in place. Various parts of the Bill, including substantial elements of schedule 6, talk about a two-year programme, after which, by way of a sunset clause, charges should not be raised on energy generators specified in clause 16.

I do not expect the Minister to make immediate manuscript amendments reflecting the change that has taken place between this morning and this afternoon, but he should reflect on the effect it will have on the Bill and whether, by way of a statement to this House or through subsequent changes in secondary legislation, he will introduce into this Bill a more accurate reflection of where we are now. I would be interested to hear from him on that in due course.

The Bill effectively has three parts. Clauses 1 to 8 essentially establish the energy bill relief scheme in legislation, which is just as well because the energy bill relief scheme has so far been effectively voluntary. It is important that we put the scheme into legislation so that it works properly. Not only do the Opposition have no quarrel with that, but we strongly support it.

As my right hon. Friend the Member for Doncaster North (Edward Miliband) told us on Second Reading, however, there are a number of issues relating to the Bill that are not quite so clear-cut. Clause 16 contains a measure that requires designated energy generators—one assumes they consist mostly of renewable generators not in possession of a CfD, although that is not specified in the Bill—to make payments over a period of time that is now in excess of the six-month energy bill relief scheme in order to support that energy bill relief scheme. There is a difference between the two timescales in place under the Bill.

Nor is there clarity, particularly in clause 16, on what the Government mean by “designated energy producers.” What the Government will designate those producers to be is one of the remaining question marks about the Bill. How will the Government decide what the designation looks like? Who is going to be designated? Over what period? And who, by definition, will be excluded from that designation? When we are talking about renewable and low-carbon energy, it is pretty difficult to define exactly who is doing what, who is or is not making super-profits, and who may therefore be excluded from designation or within designation. We are talking about energy companies that run wind farms with renewable obligation certificates. In some instances, those ROCs are relatively recent, and in some instances they cover a longer period of time. The ROC scheme under which they were founded has very different effects.

19:45

[Barry Gardiner]

I agree about the difficulties under clause 16. Does my hon. Friend share my suspicion that, actually, the designated companies are precisely those renewable and nuclear generators that have not previously entered a contract for difference? This is simply intended to be a stick to force them into a voluntary contract for difference with the Government.

[Dr Whitehead]

My hon. Friend makes a good, if somewhat speculative, point. As the Bill mentions, the Government are seeking to regularise the status of various renewable generators into some form of CfD arrangement, but of course the “compensation” one might get varies according to the status of those particular generators that do not have a CfD and are getting their remuneration by other means.

Of course, there are generators in this particular area that are not making super-profits, and indeed are not making profits at all, because in most instances they are community-owned wind farms with a large number of shareholders. The purpose of those shareholdings is, among other things, to keep bills down by paying dividends from the wind farm. Such arrangements should clearly not be designated in the same way as other arrangements, even though these wind farms are perhaps not in receipt of a contract for difference and may look like a number of other arrangements.

My plea is that, first, the Government should define, as soon as possible, what is going to be designated and how it is going to be designated. That should go well beyond what is in this Bill and ensure that those generators that are designated really are those that should pay into a scheme. After reading the Bill, I think it is possible to make those changes so that designation is fair and equitable. I am sure that the Government will, very shortly, want to come out with a scheme that enables that to happen. I will certainly be on the phone to the Minister if it does not happen very quickly.

[Graham Stuart]

That is our intention.

[Dr Whitehead]

I am delighted to hear that, and it is one gain from this evening’s debate.

On the third part of the Bill, I very much concur with a lot of what the hon. Member for Weston-super-Mare (John Penrose) said. The Bill gives powers to the Minister and the Secretary of State that provide for sweeping arrangements not only to intervene in energy markets, but to override Ofgem in various licensing arrangements. There is a power to give direction and a power to change licences, and a whole range of other measures. A number of industry figures are certainly concerned about the stability of investment they can undertake with those powers on the statute book, not knowing whether those changes could take place at short notice and in a way that may affect their investment decisions and the investment landscape for the future.

At the weekend, a senior source at one energy supplier suggested that the Secretary of State had undertaken a power grab “worthy of Henry VIII”. Obviously, our modernist Secretary of State may well be modelling himself on Henry VIII. I do not know whether he is, but this source said that this

“gives absolute power to the secretary of state over all rules governing all aspects of the UK’s energy industry, in perpetuity.”

He continued:

“That means bypassing Ofgem and the entire licensing and regulatory regime without any safeguards or time constraints and no consultation or appeal process for anyone—supplier, generator, networks—affected by any decision.”

So we are very concerned to ensure that those powers taken by the Secretary of State should at the very least have a sunset clause on them when the energy crisis has abated a little. As we can see from the legislation, no such sunset clauses are provided, which leads to a suspicion that this is a potential serious power grab by the Government, and these are powers to oversee the energy process without any of the checks and balances that we have in the system at the moment. If that is the Government’s intention, it is to be deplored. Again, I hope that at the very least the Minister could clarify his intentions on that section of the Bill and how he intends to limit the activity of these things over a period of time.

We have tabled a number of amendments, and as they relate to some of the comments I have made, I shall briefly address them. Amendment 1 would ensure that the full cost of reductions is passed on to customers. Although a passing through arrangement is contained in the Bill to deal with people such as landlords, park home owners and various others who are taking the rebates on bills on behalf of customers and supposedly passing them on but not actually doing so—I very much welcome those clauses—there are other arrangements for third parties in receipt of funds where they are not necessarily required to pass those rebates on to customers at all. For example, the Low Carbon Contracts Company gets money in from contracts for difference but is by no means obliged to pass that back to customers. It is supposed to pass this back to energy companies, but it does not have to do so, and the energy suppliers themselves have no obligation to pass it back to customers. The amendment tries to close some of those loopholes to make sure that all moneys related to this area are passed on to customers.

New clause 2, on the marginal cost of electricity, was mentioned by my right hon. Friend the Member for Doncaster North on Second Reading. The new clause would ensure that we would not be in this situation in the first place. If we had sorted out the whole question of the marginal cost of electricity as it relates to all electricity being effectively determined in retail price as if it had derived from gas and the much lower cost of renewables that we have at the moment in the system being effectively discounted, we would not have some of those renewable generators making “super-profits” and being perhaps subject to the ministrations of clause 16. That is because they would be working in the market on their own prices and looking competitively at a price set by their own boundaries, rather than working through gas in the first place. We think it is important that the Government take action on that quickly, which is what our new clause suggests we do.

I know we are running out of time, but let me come to our amendment on the Energy (Oil and Gas) Profits Levy Act 2022 arrangements. Again, as my right hon. Friend said on Second Reading, they were deplorable, as where fossil fuels are concerned 91% of profits can be returned back to those companies, and do not come to the customer to help reduce their bills, if they have investments in fossil fuels for the future. No such arrangement is provided for in this Bill as far as renewable generators are concerned; it is just a request for payment and nothing else. We want the Government to urgently look at this and bring forward a report on what the effect of reducing that 91% arrangement to 5%, for example, would have on the money that would be coming through to help customers pay their bills for the future.

Finally, as we mentioned on Second Reading, we have tabled a couple of amendments to start the process of payments from September, rather than the end of this year, as is proposed in the Bill. We think that would produce quite a lot more money for customers’ bills to be assured in the process. We understand that the Scottish nationalists are moving a manuscript amendment, new clause 18. It would worry us as it is calling for all the arrangements to be sorted out as far as what happens after six months is concerned within one month. We would prefer that we all united behind new clause 8, which would require full disclosure of the profits and turnover of oil and gas companies and various other generators over the next two years.

[David Linden (Glasgow East) (SNP)]

I suspect the hon. Gentleman is probably only clearing his throat and getting on to his speech, but may I ask him what his objection is to new clause 18? If I heard him properly, he suggested at the beginning of his speech that if the Government had brought forward a manuscript amendment, he would not necessarily be too upset. Given that the SNP has done that, via manuscript and new clause 18, what is the Opposition’s objection to that?

[Dr Whitehead]

We think that most of what is new clause 18 is unexceptionable as far as information that is required. We do not think that all this has to be or should be resolved within one month, as is proposed; getting all that information on the table about the profits and turnover of companies over the next two years is a better way to do this.

[Alan Brown]

New clause 18 is about extending support, because the Government today withdrew that support. It was supposed to be a two-year support package but as of today consumers are receiving support for only six months, not two years. Surely the hon. Gentleman should support consumers getting additional support. On the analysis of fuel poverty levels and protecting the most vulnerable, why does Labour not want to vote to protect these people and make the Government have to come to this House to report on what their policies are doing to fuel poverty?

[Dr Whitehead]

We want to get everything on the table that will be germane to decisions that may have to be made after six months about what to do, particularly about windfall levies and various other such things. That is what new clause 8 concentrates on.

20:00

[David Linden]

rose—

[Dr Whitehead]

I am about to finish my remarks, but we might well have a debate about new clause 18—

[David Linden]

Will the hon. Gentleman give way on that point?

[Dr Whitehead]

I am sorry, I cannot give away further because I am right out of time, and I know that the Chairman is encouraging me to bring my remarks to a close, which is precisely what I intend to do.

Subject to what the Minister says, we may wish to divide on new clause 3 and amendment 2. I am anxious to hear what he makes of our various other amendments, but although we probably do not wish to proceed further with them, that is not to say that they do not merit important consideration in our proceedings on the Bill. We hope the Minister will be cognisant of that.

[David Linden]

I am grateful to the hon. Gentleman for giving way—

[The Second Deputy Chairman of Ways and Means (Mr Nigel Evans)]

Order. Dr Whitehead, are you giving way?

[Dr Whitehead]

I have sat down.

[The Second Deputy Chairman]

I call Peter Aldous.

[Peter Aldous (Waveney) (Con)]

I am largely supportive of the Bill, as there is an urgent need for assistance to be delivered at speed to hard-pressed families and businesses, but it is important to avoid any unintended negative consequences for other key Government objectives, in particular energy security, the transition to net zero and the full deployment of renewables and low-carbon forms of energy production.

My constituents urgently need the support that the Bill will provide, but to regenerate the local economy and create long-term, well-paid jobs, we need investment in offshore wind, nuclear and hydrogen. There are exciting opportunities in the sector throughout east Anglia, and specifically Waveney and Lowestoft, although certain clauses in the Bill raise worries that such investment could be imperilled. I hope that the Minister will be able to allay that unease. The Government are not pursuing a windfall tax on renewables and nuclear generators because they are worried that it would deter investment. Some of the mechanisms proposed in the Bill could have a similar negative impact, and it is important that further clarification is provided quickly. I will briefly outline three specific concerns.

Clause 16, along with schedule 6, introduces the cost-plus revenue limit, which is a cap on the revenue of low-carbon energy generation. There is a worry that this mechanism could penalise investment in clean, cheap and low-carbon generation. To avoid that, there is a need for a reinvestment allowance to channel investment into low-carbon projects, which are needed to meet our net zero and energy security targets, and which will also provide the long-term route map out of the cost of living crisis.

Clause 21 enables the Secretary of State to modify the licences under which energy companies operate. Currently, the regulator Ofgem determines licence conditions. This is an arrangement that works well and has the confidence of investors. Further clarification is required as to the Government’s intentions, and consideration should be given to providing a definitive timeframe through a sunset clause for how long this provision will be in place.

Clause 19 sets out the arrangements for passing on the energy price support from generators to end users. There is a concern that the Bill as drafted does not properly take into account the fact that generators do not all operate in the same way and that they incur differing operational costs.

In conclusion, I hope the Minister can allay these concerns. I urge the Government to liaise and consult with all relevant stakeholders, including energy companies and civil society organisations, to avoid these unintended consequences, which could imperil energy security, decarbonisation and economic regeneration in coastal communities such as Waveney.

[Alan Brown]

It is a pleasure to serve under your chairmanship, Mr Evans, and to follow the hon. Member for Waveney (Peter Aldous). I very much expect that the Minister will not listen too much to my suggestions, but I hope he will listen to at least some of hon. Gentleman’s suggestions for making sure that we do not disincentivise investment in renewables and for amending some of these overreaching powers.

I would like to put on record my thanks to the Chairman of Ways and Means for selecting our manuscript amendment, new clause 18, which was obviously tabled in response to the Chancellor’s shock announcement this morning at 11 am that the UK Government’s flagship energy price guarantee policy, which we were told would last for two years, will now end in April 2023. People are already worried about the cost of living and the cost of the energy crisis, even with the support currently pledged, so many millions more will now be even more worried.

When the Chancellor gave his statement to the House later, he committed to at least some form of Treasury review in a modified scheme to protect the most vulnerable, but that in no way negates the merit of new clause 18. Given the mistakes and the recent track record of this shambles of a Government, it is surely in the House’s interest to set the parameters of a review and the considerations required for a new scheme post April 2023. The shadow Minister said that 28 days is too short a timeframe. I would argue that it is more than time enough for a Secretary of State to report back to Parliament and try to give households some certainty going forward.

[David Linden]

We can normally get through a Chancellor in 28 days, so it is ample enough time for the Government to come forward with a review.

[Alan Brown]

It is a fair point and, as my hon. Friend pointed out earlier, Labour Members also have a new clause, which they want to push, calling for a report to Parliament in 28 days, so it seems to be a timeframe that we can all agree on.

New clause 18(2) would mandate the Government to assess what average household bills will look like when the pledged support scheme ends next April. I appreciate that estimating future energy bill increases is not an exact science, but the Government should be able to come up with an indicative price range, which should also give a look-ahead at the supposedly two-year support period of the so-called energy price guarantee. This is an important exercise, because it was the Prime Minister who told us that the two-year policy would stop average bills hitting £6,000 a year. As I said earlier, the explanatory notes for the Bill state that these mitigations will prevent so-called average bills of £2,500 from rising to £4,200. That means that, without further support, average household energy bills will, on the evidence before us and according to this Government, rise to something like £4,200 to £6,000 per annum. How on earth is that affordable? Clarity is required urgently.

New clause 18(2)(b) is all about analysing fuel poverty statistics. Now, when I mention fuel poverty statistics, we need to remember that these are not statistics but real people we are talking about—people who cannot afford to heat their homes; people who might not even be able to turn on their cooker and heat their food; parents skipping meals; people with health conditions that are made worse because they are having to live in a damp house; terminally ill people who are having to move out of their homes and are unable to die in dignity in their homes because they cannot afford to heat them; people on prepayment meters who are building up their standing charge debt because they cannot afford to put money in them. That is the reality of fuel poverty. That is why I want the Government to assess and report on the reality of their policy decisions during this cost of energy crisis.

Fuel poverty statistics lag behind real time: it takes time to analyse the statistics and then bring them through. The cost of energy has gone up so quickly that past fuel poverty statistics are effectively meaningless. National Energy Action estimates that, even with a £2,500 average bill put in place, some 6.7 million households will end up in fuel poverty. We need to understand how much worse that will get across the United Kingdom. I suggest that if the Government wish to make an informed decision about what future support packages will look like and how they will actually support the most vulnerable, they should be the ones to undertake the assessment.

That feeds directly into subsections (2)(c) and (2)(d), which are about, first, assessing the merit of extending the universal scheme as it was originally intended and, secondly, looking at a more targeted approach. The key to subsection (c) is ensuring that we have no further increases in fuel poverty. Given that we are still saying that 6.7 million households will be in fuel poverty, that is an extremely tame target. The real target should be the eradication of fuel poverty, which is why I am willing to support many other amendments on the Order Paper, particularly from other parties, on energy-efficient installations and the upgrading of homes to EPC band C, which is a UK Government target. There should be greater investment in energy efficiency measures, and truly upgrading homes will reduce bills, reduce the energy demand and of course create additional green jobs.

Given how damaging fuel poverty is, and that the Government have not made clear what future support will look like, I cannot believe that the Labour party is not willing to support manuscript new clause 18 and try to force the Government’s hand to provide information to Parliament so that we know the real impact of the cost of energy crisis.

Amendment 16 is about support for off-grid homes. Earlier, I highlighted that a one-off payment of £100 for alternatively fuelled properties is insufficient. Liquid fuels have increased in price from 30p a litre to more than £1 a litre, which is three times more expensive. People cannot afford to fill their fuel tanks. They have to lay out a minimum of £500 to £600 for a delivery. If they do not have that cash, they do not get it—they do not get credit. Filling a tank costs about £1,200 once VAT is included. Why do the Government think that a one-off £100 payment is sufficient?

One of my constituents lives in an off-gas grid property. He rightly observed that the energy price guarantee is being paid for by the general taxpayer, because it comes out of borrowing or taxpayers’ money. That means that off-grid customers are effectively subsidising people on the gas grid who are getting a bigger support package. Four million households are effectively subsidising 28 million households, which actually have cheaper fuel bills. It is an incoherent policy, which is why we brought forward amendment 16, but I would also support any other proposals that would make the Government support those who live in off-gas grid properties.

I wrote to a previous energy Minister about regulation of off-grid fuels for properties. The answer I got was that we do not need regulation; the market will take care of itself. That in itself shows a complete lack of understanding of what it is like for people in rural properties who cannot shop around. Generally, there is only one supplier in the area, so it gets to set the terms and conditions and the prices of the fuel that people buy. The Government need to look at regulation of those fuels as well.

Amendments 10, 11, 14 and 15 are about giving Parliament a greater level of scrutiny and approval. It is about ensuring that proposals are implemented under the affirmative rather than the negative procedure, which puts all the powers into the hands of the Secretary of State. I tried to point this out to the Secretary of State who, as a Back Bencher, was all about Parliament sovereignty, but now that he is in the Cabinet he is yet another hypocrite who is quite happy to take Henry VIII powers and other unparalleled powers for himself. [Interruption.] I said hypocrite, yes.

[The Second Deputy Chairman of Ways and Means (Mr Nigel Evans)]

Who were you referring to?

[Alan Brown]

The Secretary of State.

[The Second Deputy Chairman]

No.

[Alan Brown]

Okay, I withdraw my remark about the Secretary of State being a hypocrite, but he has certainly changed his mind about parliamentary sovereignty. I will try to make sure that I do not stray again, Mr Evans.

Given the wide-scale nature of these measures and the criticality of support measures—measures that, as we have heard today, the Government have already reneged on—it is critical that Parliament has its say on proposals.

20:15

Amendments 10 and 11 require parliamentary approval for energy and gas support packages. Amendments 14 and 15 are about ensuring that, if introduced, the new electricity generator payment system is also undertaken under affirmative procedures. This is the revenue cap scheme that the Government really have to get correct to ensure that it does not disincentivise investment in renewables. That is why it is important that the House has a say in these matters.

Amendments 17 and 18 are also about greater Parliamentary oversight. Amendment 17 compels the Secretary of State to review the impact of any reduced energy charges for non-domestic customers in Great Britain. Amendment 18 should be self-explanatory. It compels the Secretary of State to report to Parliament how the scheme has worked and how much money has been paid out to energy companies. They also have to report how many businesses have been supported through the scheme and how that works per sector and for businesses across the various different business types.

Good governance dictates that Parliament should understand the success or otherwise of business support for energy usage and also indicate what else might be required going forward. I welcome support for businesses, but the reality is that it is long overdue. If the Government do not provide clarity on how this scheme will operate, more companies will go to the wall. They are being given unaffordable deals at the moment by energy suppliers and encouraged to sign fixed-rate contracts for long periods of time. The longer the Government dither without coming forward with this business support scheme and making it clear how it will operate, the higher the risk of business closures. That could affect the hospitality trade, the baking industry and myriad intensive-use industries. That is why we have tabled amendment 19—to force the Government to provide clarity to businesses across Great Britain as to what level of support and energy unit reductions they will provide and to do so within the next two weeks. Given the shambles of the mini-Budget and the fact that there has already been a massive U-turn on the support available for domestic energy customers, it is even more critical to provide some form of certainty to businesses.

Amendments 12 and 13 are very modest given the scale of clauses 13 and 14. It is incredible that the Secretary of State has been given carte blanche to spend sums of £100 million without parliamentary approval. While clause 14(2) states that sums exceeding £100 million need a resolution of the House, subsection (3) gives an exemption if the Secretary of State thinks that it is not reasonably practicable to obtain a resolution. All amendments 12 and 13 do is ensure more timely reporting to Parliament of such expenditure authorised by the Secretary of State.

The reality is that we need much greater clarity from the Government and from the Minister on how clause 13 will operate in practice. It lists encouraging or enabling efficient use of energy and taking steps to purchase storage capacity. I agree that those measures and principles are required for energy security and to be part of net zero transition. Infrastructure is referred to as well, but energy infrastructure is very costly and could easily cost more than £100 million, so why have the Government set such an arbitrary limit? What Government expenditure is expected to be undertaken through clause 13?

However, my real concern is that the clause could allow ad hoc purchases that do not meet strategic aims for net zero or place storage in the best locations. How will the Secretary of State decide where taxpayer money will be thrown at what projects? What is there to stop a repeat of the Seaborne Freight fiasco, where £13 million was directly awarded to a ferry company with no ferries—a move that cost many more millions in compensation? At the moment, the Government have unparalleled powers to spend money, which could lead to contracts being awarded to friends and cronies. That is why Parliament needs more power to stop that happening and to ensure there is proper oversight.

New clause 17 is also about greater parliamentary scrutiny. Surely it is logical for Parliament to understand how the Secretary of State assessed and determined the levels of gas and electricity price reductions. The new clause allows for consideration of the level of support, the merits of the Government’s providing it and what considerations are likely to be required in the future.

New clause 16 is effectively a probing clause. I accept that in many ways it states the obvious: the Government should agree with the principle it contains,

“that they do not disincentivise investment in renewables.”

However, the new clause is drafted to underline how the Government must get this right. The sunset clauses beyond the oil and gas profit levies cause concern. When considering revenue caps, the Government must take account of any that are set by the EU so that we do not become less attractive than the EU for investment in renewables.

The Government must consider exemptions for not-for-profit, co-operative and community energy projects. If those types of projects achieve a greater return than perhaps they initially expected, the revenues they receive are automatically reinvested in additional projects. We cannot put those future projects at risk, particularly small-scale renewable projects; we must accept that the additional revenue streams will do good in the long run.

I have some other small observations on some clauses of the Bill. Clause 1(8) allows the Secretary of State to modify the scheme to ensure that suppliers do not receive increased payments or, as per the explanatory notes, manage to profiteer. I welcome that principle, but can the Minister explain how it will work in reality? How will they ensure that supply companies do not profiteer?

I have read of concerns that supply companies have rushed to put customers on fixed-term contracts for two years at much higher tariffs. If their customers were still on the standard variable tariff, they would not benefit so disproportionately from the Government’s support package. The Government must take cognizance and a find a way to assess that, ensuring that they hold companies to account.

Clause 21 contains extremely wide-ranging powers to vary licences, which is causing the industry big concerns, as the hon. Member for Waveney (Peter Aldous) highlighted. How will that clause work? What checks and balances are in place? So far the Minister has not been able to explain how some of those wide-ranging powers will be utilised and implemented, and that gives rise to concern. I want more certainty about what the Government are going to do with them.

On that point, I will draw my remarks to a close. We will be pushing new clause 18 to a vote, and hopefully I have said enough to make the Labour party change its mind and come forward in support of it. Let us demand proper support for this Government and hold them to account on what they are doing about fuel poverty.

[Guy Opperman (Hexham) (Con)]

We—both this country and the entirety of Europe—are in an energy price war. It is an honour and a privilege to speak in support of this Bill and to make my first speech from the Back Benches in, I think, about seven and a half years.

It is unquestionably the case that I support the key measures. It is quite right that we support households up and down this great country, who are facing such difficulties over the next year. The measures come on top of the £37 billion package brought forward by the previous Chancellor bar one in spring this year, which offered £400 in support to every household in October, and the £1,200-plus support for the most vulnerable, including pensioners, who are particularly supported by that.

I have three points. First, I urge the Government, as I urged the Prime Minister and the then Chancellor of the Exchequer last week in questions on the Floor of the House, to conduct a communications campaign to send a message out to households and businesses about the nature of the support and how they could save money on an ongoing basis.

That is not the nanny state; it is outlining the support that people can take advantage of, and I urge the Secretary of State and the esteemed Minister to take that forward. Doing so will save the state money, because the state is subsidising the energy consumption of people up and down this country. If there is less usage, the state needs to provide less subsidy, providing savings to the Chancellor. Surely that is both self-evident and a self-fulfilling prophecy of reduction in expenditure.

Secondly, there is genuine concern about the proposed contracts for difference for biomass, given that there is already a renewables obligation subsidy that expires in 2027. I hope that the Minister will address the question of a severely subsidised biomass sector competing for timber and forestry with a non-subsidised sector that struggles to compete in those particular circumstances. I hope he will give some assurances on that.

Finally, I urge the state to follow the precedent enjoyed by Germany, Italy, France and other countries that have embraced energy saving on a much wider basis than we have here. You will be aware, Mr Evans, that in the House of Commons some rooms are heated to 30°. That is utterly ridiculous. In Germany and France, they do not heat their buildings to more than 19° and they have proper localism to drive forward energy reduction. They do not light buildings at night and they turn off hot water on a regular basis. Why does that matter? It matters because potentially they can save 2% of their energy consumption. We need that sort of leadership from the Government on energy consumption. I hope that as this matter progresses, the Minister and the Secretary of State will go away and consider how we can have either direction by the state or empowerment of localism so that our local public sector institutions, which are paying the most on energy, can be encouraged to reduce their expenditure—which, after all, is in all our interests.

[Helen Morgan]

I will not speak for too long, but I want to draw attention to the amendments tabled in my name, which I would have liked to see incorporated into the Bill.

One of my greatest concerns about the support available is for non-domestic users, which have only been given six months of certainty. As I alluded to on Second Reading, businesses need certainty to be able to plan ahead and invest. We also have local authorities raising distress calls about their budgets. To enable them to plan for the future, I would have hoped to see two years of support. That is why I tabled amendment 5. For the same reason, I support new clause 18, which provides support for non-domestic users.

Non-domestic users who signed a fixed-tariff agreement between December 2021 and April 2022 have also been left high and dry by the Bill. Amendment 7 would ensure that they also benefit from capped energy charges. Again, I draw Members’ attention to the plight of local authorities, many of which are struggling to balance their budgets for the remainder of the year.

Many businesses in my constituency are off grid, as everyone will be aware, and some of them are not covered by the energy bill relief scheme, so amendment 6 would provide them with support that has parity with that given to other non-domestic users. I urge the Government to consider that because rural businesses are up against it and struggling to see a way forward.

That brings me to off-grid homes, which have been hardest hit, but the Bill provides only £100 of support for them. People living in rural areas are hit hardest by the cost of living crisis. Not only might they be off grid and living in an older, poorly insulated home, but they face higher fuel costs to move around and higher food costs at supermarkets, so £100 of support is not enough. As I have mentioned, their heating bills have risen by about £1,200, so new clause 12 would ensure that those off-grid homes received energy cost support equivalent to those who are on grid, and amendment 9 would ensure that such payments were made directly to their bank accounts, making it easier for them to access that support. These changes would support the rural areas hit hardest by the cost of living crisis and would stop people being penalised for the misfortune of being off grid.

20:30

We have seen over the past week that failing properly to fund commitments has sent financial markets into a tailspin. As we have discussed, partially funding those commitments with an extended windfall tax would have reassured financial markets and enabled the support to go beyond the six months that was announced this morning. Lots of people are concerned about what happens after this winter, so I would like new clause 11 to be added to the Bill, so that the windfall tax can be expanded to the oil and gas giants that make eye-watering profits daily on the backs of British consumers. I support new clause 3 for the same reason.

I draw Members’ attention to the lack of attention in the Bill to cheaper, sustainable forms of energy and the need to make our housing stock, which is some of the worst-performing in Europe on energy efficiency, more energy efficient. New clauses 13 and 15 would require the Secretary of State to pay attention to those serious shortcomings and help to lower people’s bills by reducing reliance on gas, providing cheaper forms of energy and enabling them to use less. The other provisions that I have tabled would improve transparency and allow a focus on the impact of the cost of living emergency on the most vulnerable. Given the Chancellor’s statement today, in which he explained that generalised support would be withdrawn and support would be targeted at the most vulnerable, measures to ensure that that support gets to the right homes are extremely important. I urge Members to support these new clauses and improve the Bill in the way it needs to be improved.

[Barry Gardiner]

The Minister began his speech by saying that the energy crisis is a global crisis. That is true. It grew out of the surge in global demand after the pandemic and it has certainly been compounded by the Russian invasion of Ukraine. However, it has been entrenched by the complicity of those countries in OPEC that have steadfastly refused to increase production and which the Government still count as close allies, including Saudi Arabia, on which much greater diplomatic pressure should be applied.

The hon. Members for North Shropshire (Helen Morgan) and for Hexham (Guy Opperman) alluded to the way in which the Bill looks predominantly at the supply side. It should also look at the demand side. The chief executive of E.ON, Michael Lewis, has pointed out that a sustained programme of energy efficiency could have reduced the amount of energy used in UK homes by 25%—the equivalent of six Hinkley C nuclear power stations. The cheapest energy is the energy that we do not use, and the fact that 59% of homes in England are rated D or below for energy performance is a major factor in the desperate need of many families for support with their bills. A simple uprating of a home from energy performance certification D to C would save a home £500 a year—and that is on the basis of energy prices in April this year, before the latest spike. There would be even higher savings now.

That is why this summer E.ON and EDF called for the Government to double the energy company obligation scheme and for an expansion of the eligibility criteria to include 150,000 more homes. I hope that, under clause 22—under the powers to intervene that the Secretary of State is giving himself—the Government will use those powers to expand the ECO scheme precisely as those two major suppliers have requested.

While failure to address the demand side shows that the Government should have been investing in a comprehensive retrofit scheme over the past 12 years, it also highlights their failure, until Russia’s illegal war in Ukraine, to understand just how essential energy security is to our national security. Energy efficiency and renewable energy were regarded, in the words of our Prime Minister—that is, three Prime Ministers ago—as “green crap”. The truth is that, if we had rolled out a comprehensive programme of renewables and energy efficiency measures over the past 12 years, that stuff would now be regarded as green gold and there would be scant need for the provisions of this Bill.

Our failure should teach us another lesson. The way to become more energy secure and less reliant on fossil fuels is not to double down on them and devise new subsidies for fracking and new fields in the North sea, but to ramp up investments that will transition our economy from the fossil-fuelled past to the clean energy future. The Government claim that we have to expand our oil and gas production and that that will make our bills cheaper. The truth is it will not, not just because the wholesale market is an international market, rather than a domestic one, but because the North Sea Transition Authority is clear that the average time to production of any new facility is five years. Anything we do now to expand exploration licences cannot begin to have even the marginal impact that the minute percentage increase in global supply would predicate until 2027.

Moreover, in its analysis of production projections the North Sea Transition Authority has set out that the North sea basin will see annual declines of 9% and 6% respectively for gas and oil production out to 2050. That means that the Government are seeking to ramp up our dependence on fossil fuels at precisely the time they are diminishing and becoming more expensive, and are set to leave us with stranded assets and liabilities. Investment should be going into reducing demand, providing onshore wind and solar and creating the new jobs that will accompany such investment.

I set out in my speech on Second Reading the basis on which the oil and gas producers are and should be contributing to the measures in clause 1. Last year, energy prices meant that an average family were paying £1,100. After the windfall tax and the unfunded borrowing, that will be limited to an average of £2,500. The cost of that over the two years would be £31 billion, but now that the Chancellor has introduced the welcome Treasury-led review after six months, that would be simply £7.5 billion for the period in question. That is just about half a year’s worth of taxing the oil and gas producers at the global average level.

I welcome the Chancellor’s statement announcing the Treasury-led review, and urge him to ditch the investment allowance subsidy and adopt a tax rate that the rest of the globe considers fair and equitable.

[David Linden (Glasgow East) (SNP)]

I rise to speak to new clause 1, tabled in my name and those of my hon. Friends from the city of Glasgow. In doing so, I also express my support for all the amendments tabled by my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown), in particular manuscript new clause 18. I know that he will wish to press amendment 16 on the off-gas grid, which impacts constituents in the Gartloch area of my constituency.

For those of us who have the privilege of being Glaswegian, or at the very least adopted Glaswegians, arguably nothing symbolises home much more than the sandstone tenements which line our high streets and housing estates. Of course, they are not unique to Glasgow; tenements can be found in Liverpool as well as in Scotland’s lesser city of Edinburgh. Indeed, my hon. Friend the Member for Lancaster and Fleetwood (Cat Smith) even took me to see some tenements on Barrow Island last year. Let it never be said that she does not know how to organise a good date night, Mr Evans.

There is a serious point to all that and one that is particularly pertinent to Scotland in the context of both housing and energy policy. Nearly a fifth of all our housing stock is pre-1919—that is, 467,000 homes—and 68% of those have disrepair to critical elements. Furthermore, 36% have critical and urgent repair needs. The nature of these buildings is that they are incredibly expensive to heat. Without question they are genuinely beautiful, with their high ceilings and large bay windows, but they are constructed from sandstone with little to no cavity wall insulation.

It is welcome that the Government have introduced the Energy Prices Bill. Indeed, I always had faith that the Secretary of State for Business, Energy and Industrial Strategy would come round to our view that strong and regular state intervention was the way forward, but I am concerned that the Bill is only part of the solution to the energy crisis for tenement dwellers, as well as housing associations.

Back in 2019, a report was commissioned by the Glasgow and West of Scotland Forum of Housing Associations, which campaigns on behalf of community controlled housing groups. It warned of the “ticking time-bomb” of such properties. It has been estimated that the cost of restoring more than 46,000 tenement flats in Glasgow that were built pre-1919 and are deemed to be dangerous could hit £2.9 billion. I know that my local housing association, and those of my hon. Friends the Members for Glasgow Central (Alison Thewliss) and for Glasgow North (Patrick Grady), certainly do not have that in their reserves.

[Patrick Grady (Glasgow North) (Ind)]

I thank my hon. Friend for tabling the new clause. He is absolutely right about the concerns of housing associations. The cost of energy going up may mean that many of their tenants in the tenements do not want to put on the heating this winter. That is bad not only for the residents, who are our primary concern, but for the housing stock, particularly older tenemental properties. It will simply increase the future costs if those buildings become more mouldy and damp and suffer all the other effects that inclement weather can have on such structures. It is all the more important that such amendments are taken forward so that housing associations in particular can invest in energy efficiency measures to support their struggling tenants.

[David Linden]

My hon. Friend is absolutely right to put that on the record, and ng homes in his constituency, for example, will be glad that he has.

For my constituents living in Tollcross Road, Westmuir Street or Shettleston Road, living in those historic and iconic buildings comes at a cost, especially in the winter when energy consumption is higher. We all surely agree that installing solar panels and electric car charging points in homes is a good way to combat the climate and nature emergency and to make energy consumption cheaper and more sustainable. For those in tenement properties, however, that is near-impossible, which is why my new clause 1 seeks some form of additional support for these unique properties. We all agree that retrofitting properties can be helpful for energy efficiency, but in reality we will have to incentivise owners and housing associations to do that for tenements.

[Alison Thewliss (Glasgow Central) (SNP)]

My hon. Friend is making a good case. He may be aware of the project in Niddrie Road, Govanhill, where a tenement block is being retrofitted to the Passivhaus standard with Southside Housing Association. Does he agree, however, that rolling that out across the tenement stock in the city of Glasgow alone would be hugely expensive and quite disruptive for tenants, so the cost needs to be borne in mind?

[David Linden]

Yes. For those of us with a strong interest in housing policy, Govanhill is a fascinating place to look because of the innovative stuff that has happened there as a result of the SNP Scottish Government. The Passivhaus standard is incredibly expensive; I know that Shettleston Housing Association in my constituency is still paying for the development at the top of Wellshot Road. It is important, but it comes at a cost, which is all the more reason for the Government to come forward with support.

One way to do that is to zero-rate VAT on refurbishment and retrofitting, which would cut 20% from the cost straightaway and act as a fiscal stimulus for a construction sector that will clearly be affected by any impending recession. The current energy crisis gives us the ability to provide short-term support by way of a price intervention, but longer-term support with the zero-rating of VAT for retrofitting tenements.

I know that the Minister and his party are big fans of cutting taxes—perhaps not today, but certainly normally more than I am—but I hope that we can agree that approving our new clause 1 would merely require the Government to conduct an impact assessment, which is surely not objectionable to those on the Treasury Bench. Those of us familiar with Glasgow politics know that the late Sir Teddy Taylor was the epitome of what was known as a “tenement Tory”. I can guarantee that top tenement Tory status will be conferred on the Minister if he works with us tonight and accepts the new clause without a Division. In the meantime, I am grateful to the Chairman of Ways and Means for selecting the new clause for consideration, and I look forward to the response of the Minister—indeed, the top tenement Tory—when he winds up the debate.

20:45

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

I rise to speak to new clauses 6 and 7, which stand in my name.

Amid the chaos of the economic emergency unleashed by the Prime Minister’s discredited Budget, energy prices have once again increased for millions of households. While I welcome the fact that the measures in this Bill have temporarily limited the increase in energy bills, the reality is that the energy price guarantee fails to meet the scale of the crisis we face: £2,500 is still unaffordable. Indeed, the Welsh Government have estimated that energy bills of £1,971 could well push 45% of Welsh households into fuel poverty. The Chancellor has caused further uncertainty with his announcement that support in its current form will last for only six months. Many families will have budgeted on the understanding that the support would last for two years, and they will now be desperate for certainty about how they will pay for extortionate bills and rocketing mortgages.

Plaid Cymru has urged the UK Government to go further, and to slash average bills to the pre-April levels of £1,277. New clause 7 would require the UK Government to publish an assessment of the impact that such an action would have on the number of households living in fuel poverty, and the number of children living in both relative and absolute income poverty. I think it is a fair question to ask about how these measures affect the poorest families.

Fuel poverty increases the risks of developing respiratory and cardiovascular diseases, while poverty in childhood affects education and career prospects, and it can even cut short life expectancy. There are other costs, as we heard earlier, with tenement buildings in relation to the costs of energy, and people scrimping and saving as best they can. Energy companies should of course pay their fair share for this additional support through an expanded and backdated windfall tax on oil and gas companies, and scrapping the investment allowance.

If the Chancellor wants to reduce the cost of the energy support package, the answer is not to break promises made to millions of households, but—and on this surely we can all agree—to focus on reducing energy demand. The inefficiency of our housing stock means that households are wasting hundreds of pounds a year on energy that immediately escapes through draughty walls, windows and ceilings. New clause 6 would require the UK Government to work with the Welsh Government, the Scottish Government and the Northern Ireland Executive to assess the benefits of a housing decarbonisation scheme in terms of the impact it would have on energy bills, the number of households living in fuel poverty and climate targets.

Even before energy prices skyrocketed, the Welsh future generations commissioner estimated that £3.6 billion of investment from the UK Government could unlock a Welsh home insulation programme that would save Welsh households an average of £418 a year on their energy bills. This benefit extends beyond lower energy bills. National Energy Action has estimated that, due to the impact of cold homes on health, for every £1 spent on improving energy efficiency and retrofitting fuel-poor homes, the NHS saves 42p, and that the potential benefit across the UK of ensuring that nobody lives in a cold home amounts to more than £1.5 billion per year. This is using public money to real, direct effect in saving energy and in having a real effect on people and their lives.

We are about to enter a new phase of Conservative austerity, and those of us in this House who understand the deadly consequences of the last 12 years must push back against the pernicious narrative that this is the only way to ensure economic stability. Instead, we must make the case for the prudent investment that has economic and social benefits, and there is no better place to start than a street-by-street home insulation programme.

I am not seeking to divide the Committee, but I would very much appreciate a response from the Minister on our new clauses 6 and 7. I want to mention that, if I had time to do so, I would also speak in support of amendment 16 and new clauses 12, 10 and 9, which also include many important measures that we should be taking into account at this time.

[Munira Wilson (Twickenham) (LD)]

I rise to speak to new clause 4 and amendment 4, both in my name and that of my hon. Friend the Member for Richmond Park (Sarah Olney). These amendments seek to address the inequality of support offered to some 480,000 households across the UK that benefit from communal energy provision. This Government have repeatedly promised to provide equivalent support to those living in households on communal heat networks, yet this Bill plainly fails to realise that equivalence in legislation with other households that will be supported through the energy price guarantee.

Heat networks supply heat to buildings from a central source, avoiding the need for households and workplaces to have individual energy-intensive heating solutions, such as gas boilers. They are one of the most cost-effective ways of reducing carbon emissions from heating, and indeed they have been encouraged by the Government. Many who are on communal heat networks live in London, and there is a number of such blocks of flats in my constituency and the neighbouring constituency of Richmond Park. Residents in Wharf House in Teddington in my constituency are facing energy price rises of 560%, and it is not uncommon for those on communal heat networks to be facing price rises of over 500%. These people can be living in private housing, as is the case in my constituency, but particularly across London many affected by this issue live in social housing and in buildings that range from Victorian mansion flats through to very recent developments.

Many of my constituents and those of my hon. Friend the Member for Richmond Park (Sarah Olney) who have been in touch are very worried about their rising bills and what help they will receive. I presented a petition to Parliament, I have written letters to the Secretary of State for Business, Energy and Industrial Strategy, and I have tabled parliamentary questions. At each turn, and indeed in the Prime Minister’s statement on the energy support package some weeks ago, reference has been made to support for those on communal heat networks, and we have repeatedly been told, including in the BEIS factsheet, that heat networks will receive support equivalent to both the energy price guarantee and the energy bills support scheme. Indeed, the Minister currently on the Front Bench replied to a written question from me last week promising that the Government want heat network consumers to receive support equivalent to that provided to mains gas and electricity consumers.

Yet in this Bill it transpires that thousands of households will receive support second hand through suppliers and only for six months. Until this morning we knew that other families on average would have their bills capped at about £2,500 for two years, whereas households connected to heat networks were going to face a cliff edge after six months. I appreciate that policy has changed today, but the lack of equivalence remains, which is why I was still keen to speak to these amendments.

As the Government seek to review their energy support scheme after six months, they need to address the lack of equivalent support for those living in buildings with communal heat networks. The Liberal Democrat amendments would ensure that every person who is part of a heat network received a cost reduction that is equivalent to that of those benefiting from the energy price guarantee, and for the same period of time. That would achieve equivalence, which the Government have proposed.

Those who live in buildings with communal heat networks should not be penalised for doing the environmentally responsible thing that the Government have urged them to do. I therefore urge the Minister to honour the Government’s promise and I hope that in his closing remarks he will address the issues that these amendments raise.

[Jim Shannon]

I want to begin by thanking the Government and the Minister for all that they have done thus far in the energy crisis. We all sometimes get a bit caught up with our lists of demands and the things we want done without appreciating the steps that the Government have taken; I want to put that on record before I start.

I am thankful that the people of Northern Ireland are to get the same support as those on the mainland. MPs from Northern Ireland had a Zoom meeting with the Secretary of State last Thursday, and we were very encouraged by what he said, by his delivery and by today’s legislation; this is good news and we thank him for that. Some 68% of households in Northern Ireland use oil, and there is a scattering of households across rural areas—some in my area and some out to the west of the Province—that still use coal, and we all know by how much the price of coal has jumped. The Secretary of State has given encouragement on how support will work for those who use the payment card system.

I want to make a plea on behalf of pensioners. Not every pensioner will use the £100 for energy, so I want to make sure there is a system whereby pensioners are protected and that, if they do not use all the money, the remaining sum can be carried over. The pensioners who have spoken to me about this want that reassurance.

My main reason for speaking is to make a plea for the working poor, as I did earlier in an intervention on the Secretary of State. I know that this finds receptive ears in the Minister and in the Government, because they see those issues that I see every day. There are people in full-time employment who were managing before the crisis but now have to find, for example, an extra £250 for their mortgage and an extra £30 a week for fuel for travel to Belfast from the peninsula. Dog food is also up by 30%, and groceries are up by 20%, with milk up from 99p last year to £1.75 this year—a 75% increase. Those are just a couple of examples of the massive increases that we are experiencing back home.

I go to work on an egg every day—two eggs, to be precise—but eggs are up from 99p for a six-pack to £1.39. Biscuits to go with a cup of tea, which we have in Northern Ireland with regularity, are up some 30%. Those are issues for the working poor, and that is not even adding in the energy issues. I want the Government to ensure that the working poor are key in what they do as they move forward. To be fair, I believe that they have.

I am thankful for the help given so far, but I believe that working families need that extra bit of consideration. They need help to get to work and help to pay for their groceries. They need an uplift in child benefit to allow them to ask for a wage increase. It is not about being able to take family holidays and eating out all the time; it is about surviving and being able to pay their mortgage and all else. What is being done to help those families? The Minister will give us some encouragement in summing up. It is good to have that on the record so that the people back home who ask me about these things will know what has been done. That is aside from energy costs, which are not even part of the equation at this stage.

There is the shop owner, for example, who cannot match the wage increases in the public sector, and her staff know that she cannot do any more than she is. How can we help them? It is great that public sector wages are going up, but how do small and medium-sized enterprises do the same? They cannot. The Government and the Minister must reach out and help. Those businesses are facing electricity bills at four times the previous rate. The hon. Member for Twickenham (Munira Wilson) referred to an increase of almost 550%. How can anybody absorb that? That is impossible.

The price of goods is up massively. Businesses are fighting to stay alive. The SMEs in my constituency—there is a large number of them—create employment across sectors. So never mind matching public sector pay; we must do more to secure jobs in SMEs by helping their owners.

I gave a commitment that I would not speak for too long, Mr Evans, so I will finish with this. I recognise that money does not grow on trees—if only it did, we could lift it off every day we wanted it—but we do need employment and businesses who hire people. For the working poor, will the Minister and the Government do that wee bit more to ensure that they will not suffer adversely through the crisis that we are all experiencing together?

[Graham Stuart]

I thank all speakers for their contributions, which have been typically thoughtful. It was a pleasure for the whole Committee and it seemed right to have the ever-genial hon. Member for Strangford (Jim Shannon) bringing the Back Bench contributions to a close. I have a lot to cover but will none the less try to keep myself to a limited time.

The hon. Member for Southampton, Test (Dr Whitehead), who spoke for His Majesty’s Opposition, asked whether we will need to amend the Bill because of the changes announced this morning by the Chancellor. Counsel’s advice is that we will not. The powers in the Bill fit perfectly well with that six-month period and any review and extension that comes thereafter. He also asked about the definition of electricity generators, including community groups, and the appropriateness of that. The affirmative procedure will be used for the first regulations precisely to allow us to define that, understand that and ensure that we are targeting the organisations we wish to target and excluding those we do not.

On Henry VIII powers, and why clauses 21 and 22 do not have sunset clauses, the Bill makes clear that the clauses must be used in response to the current energy situation, or in connection with the Act, regulations or schemes within it. The vast majority of the powers in the Bill are time-limited, including the powers to make regulations and schemes that might require such modifications and directions.

20:59

Such a large number of points were made. One issue raised was on the checks and balances Parliament will have over future spending under the spending power. The Secretary of State will report quarterly on the use of the spending power to ensure proper checks and balances are in place. As the hon. Member for Kilmarnock and Loudoun (Alan Brown) noted, any spending over £100 million per project in response to the energy crisis will need authorisation from the House of Commons.

Many Members rightly focused on people in fuel poverty and the risks thereof. We see improving the energy efficiency of homes as the best way to tackle fuel poverty in the long term. We are doing that through a number of energy efficiency schemes addressing different housing types and tenure types. We announced further energy efficiency support through ECO+. Importantly, we are also supporting households with their energy bills through established schemes, including the warm home discount, the winter fuel payment and the cold weather payment. Homes that are EPC C or above have gone, I think, from 14% to 46% since 2010. If the hon. Member for Brent North (Barry Gardiner), who is watching his phone and not listening to me, had done more when he was Environment Minister in the last Labour Government to get people’s homes brought up to EPC C, then we would have seen a heck of a dividend today, but sadly that is not what the Labour party did.

What are we doing, generally speaking, to support vulnerable consumers? The Government have set out decisive action to support people and businesses with their energy bills. That is what we are doing. Earlier this year—it is important to contextualise the support in the Bill with the other support the Government are providing —the Government announced a £37 billion package of support to help households with the cost of living, targeting the most vulnerable households first. That included an £11.7 billion energy bill support scheme worth, as we discussed, up to £400 each for about 28 million households. When we talk about £2,500, that is before the £400, which is a further reduction. And, of course, the 8 million households on means-tested benefits received an additional £650 payment. More than 8 million pensioner households who received the winter fuel payment will also receive a £300 cost of living payment. Some 6 million households who receive disability support will receive the £150 disability cost of living payment. All together, we have put in place significant steps to ensure that those who are the poorest are, albeit with price pressures on energy, in no worse position overall this year than they were last year. That has been our aim.

I will not say too much more on the energy efficiency front. My hon. Friend the Member for Hexham (Guy Opperman) talked about the importance of energy efficiency, and I think he is quite right. Communicating that in the right way is the issue. Finding the right interlocuters, the right people, to talk to the public is terribly important. My hon. Friends raised the Henry VIII powers and I think I have already dealt with that.

[David Linden]

Will the Minister give way?

[Graham Stuart]

I am going to press on, if I may.

Turning to amendments 2, 3, 10 and 11, and new clauses 7, 9 and 17, for amendments 10 and 11, designating a scheme is simply a matter of identifying the scheme documents that the Secretary of State already has the powers to provide. Therefore, the affirmative procedure would be disproportionate. New clause 7 requires the undertaking of an impact assessment on setting the price reduction at pre-April Ofgem cap levels. The unprecedented level of support introduced via the scheme and others in the Bill means that I do not think this is necessary and I ask Members not to press it to a Division.

[David Linden]

Will the Minister give way?

[Graham Stuart]

I have so much to do and a duty to cover as much as I can, having agreed not to go on too long.

New clause 9 aims to remove regional variations from standing charges. Ofgem, which is responsible for the network charging regime, is considering that matter and we should not pre-empt the review’s outcome in the Bill.

Amendments 2 and 3 aim to enable the backdating of the gas price reduction scheme in Great Britain to begin from 8 September. The Government have designed the scheme to work in combination with the 22 May cost of living package to which I referred. That ensures that the most vulnerable households will see little change in their energy between last winter and this. I therefore do not see any need to alter the operative date of the energy price guarantee schemes.

I move on to amendments 19, 17, 18 and 7, new clause 5 and amendment 5 on the energy bill relief scheme. On amendments 17 and 19, the Government fully intend to introduce regulations under clause 9 and we expect them to be laid in Parliament by the beginning of November. I have committed to publishing a review of the scheme in three months.

[Barry Gardiner]

Will the Minister give way?

[Graham Stuart]

If the hon. Gentleman will allow me, I will try to cover—

[Barry Gardiner]

The Minister did actually refer to me.

[Graham Stuart]

Indeed. On amendments 5 and 7, I am pleased to note that the hon. Members for North Shropshire (Helen Morgan) and for Richmond Park (Sarah Olney) agree with my decision to extend the eligibility date for customers on fixed-term contracts back to 1 December 2021. I hope that they also welcome our commitment to review the scheme, and I hope that that will please the hon. Member for Brent North.

[Barry Gardiner]

Will the Minister give way?

[David Linden]

Will the Minister give way?

[Graham Stuart]

The hon. Member is so persistent that I will give way to him.

[David Linden]

Hope springs eternal. In his summing up, the Minister has not yet touched on new clause 1. I suspect that that is nothing to do with the fact that he does not know what a tenement is, but can he touch on new clause 1, please?

[Graham Stuart]

I addressed new clause 1 in my remarks at the beginning of the Committee. I do not know whether the hon. Gentleman was here, but if he was, he should have paid attention, and if he was not, I suggest he should have been.

I turn to amendments 16, 6 and 9 and new clauses 12 and 10 regarding consumers who are off the gas grid. Amendment 16 seeks to establish a domestic fuel reduction scheme in Great Britain for off-gas grid homes. The Government are providing a set payment to such homes through the alternative fuel payment scheme. There has been a lot of attention on off-grid homes.

[Alan Brown]

Will the Minister give way?

[Barry Gardiner]

Will the Minister give way?

[Graham Stuart]

I will not. Amendments 6 and 9 and new clause 12 would require equivalent support for domestic and non-domestic consumers. We have committed to providing equivalent support for consumers on alternative fuels. The Secretary of State has said that he will put the workings in the Library, and I appeal to hon. Members on both sides of the Committee to recognise that the support is comparable. It is therefore important not to tell those who are off-grid that they are not getting comparable support when indeed they are.

[Barry Gardiner]

On a point of order, Mr Evans. Will you confirm that when a Minister, or indeed, any Member of Parliament, refers by name to another Member, it is courtesy and normal practice to allow them to respond to the point that was made? Indeed, in this case, the Minister talked about me doing more, as a Minister in the Labour Government, on ensuring that we had insulation. However, he seems to forget that in 2013, his Government cut that by 92%—

[The Second Deputy Chairman of Ways and Means (Mr Nigel Evans)]

Order. The hon. Gentleman is doing an intervention now. Is the Minister giving way?

[Graham Stuart]

The hon. Gentleman has just shown why no one in the Chamber wished me to give way to him, other than himself.

The Government have committed to delivery of the payment this winter. Requiring that payment to be made directly to consumer bank accounts would significantly slow this down. Similarly, new clause 10 would require the Government to implement a heating oil voucher scheme for households in Northern Ireland. Again, that would significantly slow down delivery, so one of the challenges that we have had in engineering the various programmes is to make sure—

[Alan Brown]

rose—

[Graham Stuart]

In the knowledge that the hon. Gentleman is succinct and will be welcomed by the Committee, I give way to him briefly.

[Alan Brown]

I am grateful. Our amendment 16 echoed the language that is in the clauses on the electricity and gas support mechanism by stating:

“The Secretary of State may establish a domestic fuel reduction scheme…for off gas grid”

properties. It does not compel the Government to do anything; it just gives them the power to do that. Why will the Minister not accept that simple amendment, which states that the Secretary of State “may establish” that scheme?

[Graham Stuart]

There are many statutes that include the word “may” from which we can take it that the Government will do what is set out. I am pleased to say that it is absolutely our intention to ensure that those off grid are treated comparably to those on grid.

[Peter Aldous]

The past 10 years have been remarkably successful, with the offshore wind industry and the Government working hand in hand. The industry has raised genuine concerns, which I briefly outlined in relation to clauses 16, 19 and 21, about the direction of that relationship and how it is being imperilled. Will the Minister agree to meet the industry and address those concerns as the Bill progresses?

[Graham Stuart]

As my hon. Friend would doubtless expect, I regularly meet energy companies. I have absolute confidence. One of my biggest concerns when we were looking at the package was to ensure that there are no disincentives to investment in renewables. It is noticeable that the EU has come up with a scheme. We are talking about prices linked to gas that are completely outwith any of the expectations of those who run long-standing nuclear and other low-carbon production. This is an intervention that deals with prices well beyond any prior expectation. It will therefore not disincentivise or undermine any existing business plans.

The contracts for difference that this Government brought in are now being mimicked around the world. In the last auction, 11 GW came in: so successful was it that we are now moving to annual auctions and CFDs. It is also worth saying, on the record, that renewables obligation certificates and other support mechanisms are being entirely honoured; this measure is merely about the spot price, which is excessive. We will come forward with further proposals in due course and will consult with the industry and others to ensure that we act in a way that does not disincentivise investment.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clauses 2 to 30 ordered to stand part of the Bill.

New Clause 3

Report on additional expenditure treated as incurred for purposes of section 1 of the Energy (Oil and Gas) Profits Levy Act 2022

“(1) The Secretary of State must, within six months of the date of Royal Assent to this Act, publish and lay before Parliament a report on the effect of reducing the amount of the allowance under section 2(3) of the Energy (Oil and Gas) Profits Levy Act from 80% to 5%.

(2) The Report must set out projections of the effect of the reduction set out in subsection (1) on domestic and non-domestic energy bills.”—(Dr Whitehead.)

This new clause requires the Secretary of State to produce a report assessing the impact of reducing the investment allowance for oil and gas companies as set out in the Energy (Oil and Gas) Profits Levy Act from 80% to 5%, and in particular to assess such a reduction’s impact on domestic and non-domestic bills.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

21:12

Division 57

Ayes: 227

Noes: 302

Manuscript New Clause 18

Energy support after April 2023

‘(1) The Government must lay a report before the House of Commons within 28 days of Royal Assent stating what energy price support it will provide from April 2023 onwards.

(2) The report must also contain—

(a) an estimate of what average domestic energy bills are expected to be in April 2023 if no further support provided;

(b) an estimate of how many households will be classed as being in (a) fuel poverty and (b) extreme fuel poverty if no further support is provided;

(c) what the extension of the universal support scheme for a further—

(i) 6 months;

(ii) 12 months and

(iii) 18 months is estimated to cost; and

(d) what alternative support schemes the Government will introduce to prevent any further increases in fuel poverty and protect the most vulnerable including—

(i) pensioner households,

(ii) those with disabilities and

(iii) those in receipt of benefits.’—(Alan Brown.)

This new clause would require the Government to make a report to the House setting out the energy support it will provide from April 2023 onwards.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

21:26

Division 58

Ayes: 61

Noes: 304

Schedules 1 to 5 agreed to.

Schedule 6

Time limits on the exercise of certain powers under this Act

Amendment proposed: 2, page 36, line 17, after ”may” insert

“provide for the reduction of the amount charged for domestic electricity supply from 8 September 2022 but”— (Dr Whitehead.)

This amendment allows the domestic electricity price reduction scheme to begin from 8 September 2022.

Question put, That the amendment be made.

21:40

Division 59

Ayes: 229

Noes: 303

Schedules 6 and 7 agreed to.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment.

Third Reading

King’s consent signified.

21:54

[The Secretary of State for Business, Energy and Industrial Strategy (Mr Jacob Rees-Mogg)]

I beg to move, That the Bill be now read the Third time.

I merely thank everyone in all parts of the House for their participation: the official Opposition, the SNP, the Liberal Democrats and, of course, Conservative Members. The support from Northern Ireland is particularly welcome, as the Bill was essentially required for Northern Ireland. I thank the House for its kindness and expedition in completing all stages of the Bill so swiftly.

21:54

[Edward Miliband (Doncaster North) (Lab)]

I acknowledge the words of the Secretary of State. This is important legislation to get onto the statute book. I will make one point: there are many issues still to be resolved in secondary legislation, and I hope and expect—I know from our conversations that he will take this seriously—that there will be co-operation on those issues.

21:54

[Alan Brown]

Obviously, we did not vote against the Bill and we will not do so on Third Reading either. We recognise that people need support, but the Government need to recognise that people need even more support after today as the Chancellor has pulled what was meant to be a two-year support package. We should bear in mind that the Prime Minister said that the £2,500 average bill support package was supposed to stop energy bills for households rising to £6,000 a year. By default, today’s decision by the Chancellor means that if there is no further support the average household bill will, according to the Prime Minister, rise to £6,000. That is unsustainable and that is why we tabled new clause 18. It is imperative that the Government come back with a support package and clear analysis that shows that they understand the gravity of the situation.

I would be happy to work with the Government, but although the Secretary of State was kind enough to thank everybody for their contributions I did not hear many takeaways for improvements to the Bill, to be honest, but I hope that that will change as we go forward.

Question put and agreed to.

Bill accordingly read the Third time and passed.