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Caroline Lucas (Brighton, Pavilion) (Green)
I beg to move,
That this House has considered fossil fuels and increases in the cost of living.
It is a pleasure to serve under your chairship, Sir Robert, and to open this important debate on fossil fuels and increases in the cost of living. As we start 2023, households up and down the country are facing extraordinarily difficult circumstances, as we all know from our constituency mailbags, thanks to the cost of living scandal that Government policy has too often exacerbated rather than alleviated. Hikes in energy bills mean that over 9 million people—18% of the population—spent Christmas in the cold and damp, unable to heat their homes, and facing a new year with little respite, with experts warning that high gas prices are here to stay.
At the same time, the climate emergency is deepening and accelerating. Last year marked a year of extremes. It was the UK’s hottest on record, with the average temperature topping 10°C for the first time and the summer’s scorching heat made 160 times more likely by the climate crisis. It is clear that something is fundamentally wrong here, yet shockingly, I note that the climate and energy crises were entirely absent from the Prime Minister’s priorities that he outlined last week.
Fossil fuels are at the very heart of both the cost of living and the climate crises, choking our precious planet while subjecting families to sky-rocketing bills. Weaning ourselves off fossil fuels holds the key to not just ensuring a safer planet for future generations but creating warm and comfortable homes, bringing down bills and guaranteeing a supply of abundant green energy to deliver the transition to a zero-carbon economy. The bottom line is that, for a safe and prosperous future, we need to keep fossil fuels in the ground.
I want to look more deeply at the cost of living crisis that is facing so many of our constituents. As the Minister will know, households are already struggling to cope, with almost 60% of people saying that their financial situation has deteriorated over the past year. The Resolution Foundation has warned that 2023 will be “groundhog year”, with further cuts to living standards. Indeed, even with the support announced by the Government last year, a staggering 7 million households will still be in fuel poverty this winter, rising to 8.6 million from April, with the most vulnerable hardest hit.
It is profoundly shocking that one third of people with disabilities live in cold, damp homes and that a quarter of those with health conditions that are exacerbated by the cold cannot afford to heat their homes to a safe standard. This comes with serious health risks and puts further pressure on our severely under-resourced health service, which, as we all know, is already in serious crisis. In my Brighton, Pavilion constituency alone, there are several thousand people living with a cardiovascular or respiratory condition whose health is at risk if they cannot afford to put their heating on. It is genuinely astounding that the Government are planning on cutting the amount of support available to the most vulnerable households next year, just when bills are set to increase again, reducing support by 10% from £1,500 to £1,350. Will the Minister commit to addressing that gap? Will he seriously consider providing further support for those vulnerable households, given that bills are set to increase by 20% from April?
Patrick Grady (Glasgow North) (SNP)
I thank the hon. Lady for giving way and congratulate her on securing the debate. I have heard many similar testimonies from constituents, particularly over the festive period, including from young people who wrote to me as part of the Warm This Winter and Parents for Future campaigns. I heard heartbreaking stories of children seeing their breath in the morning and not being able to recover from colds and coughs because they cannot keep their houses warm. I fully agree with the calls she makes. Those people also recognise in that correspondence the climate crisis and the need, for example, to not start new oil and gas exploration, which the Scottish Government have this morning announced a presumption against. We have to find alternative, cheaper, cleaner, greener ways of keeping warm.
Caroline Lucas
I thank the hon. Gentleman for his intervention and join him in paying tribute to Warm This Winter, which has done fantastic work in gathering those case studies and presenting them to us. I congratulate the Scottish Government on their announcement this morning about a presumption against more fossil fuel exploration, because we know that getting more new fossil fuels out of the ground is driving both the climate crisis and—ironically, at a time when gas is nine times more expensive than renewables—the cost of living crisis.
Wera Hobhouse (Bath) (LD)
The Government seem to have no money for working people, yet when it comes to fossil fuel companies they have been able to find—from somewhere—£13.6 billion since the Paris agreement. To give the Rosebank oilfield £500 million in taxpayers’ money is a disgrace when families face immense pressures. Does the hon. Lady agree that it is time for oil and gas subsidies to be phased out once and for all?
Caroline Lucas
I thank the hon. Lady for her intervention, and she will not be surprised that I entirely agree that fossil fuel subsidies should go. Indeed, that has been said at several of the big climate global conferences—the conferences of the parties. There is supposed to be an agreement on getting rid of the subsidies, but we are certainly not leading by example, sadly.
I want to speak about prepayment meters, although I will come back to the subject of Rosebank. One of the ironies about Rosebank is that most of the oil extracted is for export in any case; we cannot even argue that it is doing anything to help us here at home. However, there is something serious going on with prepayment meters, and I am particularly alarmed by their forced installation. We have seen stories in the press, for example, of mothers returning home to find that meters have been installed while they were out. Locksmiths have come in and people have forced their way into homes to install prepayment meters. Not only that, but magistrates have been approving hundreds of warrants to install meters in just minutes—496 warrants in three minutes and 51 seconds, to be precise.
Prepayment meters should not be installed by warrant, and they certainly should not be approved en masse in such a manner, with no consideration of individual cases and individual vulnerabilities, but when I asked what assessment the Government had made of the impact on vulnerable people of the batch approval of warrants, I was shocked to receive an answer stating that
“the information which must be provided to the court is identical in each case”.
In other words, it makes no difference whether cases are considered individually or together, but that represents total disregard for individual people’s welfare and extraordinary complacency regarding the failings of the system. Surely the Minister sees that if magistrates are not provided with adequate information, they are unable to make informed decisions that take into account people’s vulnerability.
In answer to another question I asked, the Minister simply tried to pass the buck to Ofgem, but given that the Government have the power to implement a moratorium on the forced installation of prepayment meters by court warrant, that, frankly, does not wash. The forced installation of prepayment meters is hugely distressing; it is an invasion of privacy.
Will the Minister commit himself to introducing a much-needed ban and to putting an end to the intolerable situation in which vulnerable people are forced on to higher rates, which brings with it the added risk of self-disconnection? Citizens Advice has reported a significant increase in the number of people it sees who cannot top up their prepayment meters each month—from 1,119 in November 2021 to 3,331 in November last year. Forcing people on to prepayment meters quite simply should not be happening, which is why the ban is needed so urgently.
I want to emphasise that the difficulties facing households are not inevitable. Ministers are fond of blaming those difficulties on President Putin’s illegal invasion of Ukraine, with the Chancellor pointing to what in his autumn statement he called
“a recession made in Russia”.—[Official Report, 17 November 2022; Vol. 722, c. 855.]
While that is true in part, blaming it entirely on President Putin is, frankly, dishonest. The crisis is one of political choices—choices that have been made not just over the past 12 months, but during the past 12 years of Tory rule. As we now know, the decision by the Conservatives, under David Cameron’s regime in 2013, to cut the so-called green crap has added billions to household energy bills, with installations of loft and cavity wall insulation subsequently falling off the cliff by a staggering 92% and 74% respectively in 2013.
Indeed, while there were 1.6 million installations of loft insulation, for example, in 2012, that dropped to just 126,000 the following year. Installations of cavity wall insulation dropped from 640,000 in 2012 to just 166,000 in 2013, and in 2020 there were just 72 installations of loft and cavity wall insulation combined. That is a damning indictment of the Government’s approach.
The poor state of the UK’s inefficient housing stock meant that in June last year households at energy performance certificate band D or below were effectively paying what has been called an inefficiency penalty of about £900 on average per year. It is frankly unforgiveable that in response to the current crisis the Government have once again overlooked and paid insufficient attention to the importance of energy efficiency. Their own Climate Change Committee expressed regret in November that it was now
“too late to introduce new policies to achieve widespread improvements to the fabric of buildings… this winter.”
For almost a year, the Government refused to act on what was the cheapest and quickest way to cut energy bills and address the UK’s notorious leaky houses. This is nothing short of a scandal, and it is also such a wasted opportunity, because ending our society’s addiction to fossil fuels also brings with it an opportunity to create warm, decent homes for everyone, where households are not shackled to high energy bills or trapped in dank and draughty homes, unable to turn the heating on.
Alyn Smith (Stirling) (SNP)
The hon. Lady is making an excellent speech, as she always does, and I could not agree more on the importance of energy efficiency. Does she also agree that those who are off grid and reliant on heating oil have the most to gain from piling into renewables and greater energy efficiency, because it would lower housing costs and increase climate efficiency?
Caroline Lucas
I thank the hon. Member for his intervention and I entirely agree. I worry that people who are off grid in that way are essentially being hung out to dry. They are not being given the support they need, and they are some of the most vulnerable.
I am pleased that the Government have finally seen sense and committed to £6 billion of new funding from 2025 to 2028, but this is too little, too late for people who are struggling to stay warm right now and who will face the same situation next year. What is more, it is still not clear what that £6 billion will be used for, so can the Minister explain what exactly it will be allocated to? Is it for the establishment of new schemes or the continuation of existing ones such the social housing decarbonisation scheme?
Will the Minister also confirm when we will get more details about the energy efficiency taskforce? For months, I and many others have called for a nationwide, street-by-street, local authority-led, home energy efficiency programme to genuinely insulate households from high bills for the long term. It really is not rocket science. Just last week, the Environmental Audit Committee, of which I am a member—I am very pleased to see the Chair, the right hon. Member for Ludlow (Philip Dunne), with us this morning—released a new report calling for what we called a national “war effort” on energy saving and efficiency, with upgrading homes to energy performance certificate C or above to be treated as a national priority.
That would deliver a massive benefit to our constituents. Citizens Advice estimates that upgrading all UK homes to EPC C would save households nearly £8.1 billion a year at current prices. UK homes are notoriously leaky. They lose heat three times faster than those in other parts of Europe, which means that our constituents are more vulnerable to high global gas prices than their neighbours.
Peter Grant (Glenrothes) (SNP)
Like my hon. Friend the Member for Stirling (Alyn Smith), I congratulate the hon. Member on securing this debate. She is referring to the appallingly bad standard of insulation in the United Kingdom’s homes. I do not know if she is old enough, but I remember protesting as a student in the 1970s against a new nuclear power station at Torness on the east coast of Scotland. Even at that time, it was identified that if the money that it would cost to build a nuclear power station had been spent on insulating homes and buildings, the energy saved would have been significantly more than Torness could produce. Does she agree that the short-sighted, almost religious zealot-like fascination with nuclear power in the United Kingdom has been damaging our energy prospects for a great many years and has got to stop?
Caroline Lucas
I thank the hon. Member for his intervention, with which I agree 100%. The nuclear obsession is using vast amounts of money, diverting attention and also sending mixed signals to investors, who really do not know what kind of energy future this country is planning for itself. It is a massive white elephant. Nuclear power stations are not coming in on budget and on time anywhere, and the idea that we can now achieve that here in the UK, against all the evidence in so many other countries—and, indeed, against the evidence here at home with Hinkley, for example, which is massively over budget and massively late—beggars belief.
Philip Dunne (Ludlow) (Con)
I, too, congratulate the hon. Lady on securing this debate, and on her important contributions to our deliberations on the Environmental Audit Committee. Just before getting diverted on to nuclear, she mentioned the importance of the energy efficiency taskforce, on which I completely agree with her. Does she agree that when the Government choose to respond to the report we published as a Committee earlier this week, which she mentioned, it would be most helpful if they took this opportunity to clarify what the taskforce’s terms of reference and primary objectives will be, so that it can be used as a Government-inspired device to accelerate this national mobilisation of energy efficiency, which we all agree needs to be undertaken?
Caroline Lucas
I thank the right hon. Gentleman for his intervention and his kind words. I absolutely agree: the taskforce has a real potential to make a difference, but we are still in the dark about many of the details. If the Government gave us more information, it would give a lot of comfort to a lot of people to know that there is a guiding mind that will ensure we accelerate these urgent installations of energy efficiency.
I turn to oil, gas and fossil fuels. Just as it was political choices that led to families being unable to heat their homes, so was it a political choice by the Government to protect the oil and gas companies, whose profits have grown fat from the spoils of war. As households struggle to make ends meet and our planet burns, the Government have chosen to double down on the very thing that is at the heart of these multiple crises. The UK is set to grant more than 100 licences to explore for more oil and gas in the North sea. Although the windfall tax has been increased to 35%, bringing the total tax on oil and gas to about 75%—I note, in parentheses, that that is still lower than Norway’s, at 78%—it is genuinely incomprehensible that the Government have failed to remove what is being called the gas giveaway, which means that oil and gas companies will still be able to claim £91.40 in tax relief for every £100 invested. What is more, from 1 January, a company spending £100 on so-called upstream decarbonisation—essentially reducing emissions from the process of extracting oil and gas, which of course then goes on to be burned—is now eligible for £109 relief on every £100 invested. In other words, we are paying the oil and gas companies to do the decarbonisation that they should be paying for. They are not broke; they are literally saying that they have more money than they know what to do with. I suggest that they start actually paying their own way.
New oil and gas extracted from the North sea will neither deliver energy security nor bring down bills, but will inevitably come at huge cost to the taxpayer. The hon. Member for Bath (Wera Hobhouse) mentioned Rosebank, the UK’s largest undeveloped oilfield. The costs to the taxpayer if it goes ahead are enormous. At triple the size of the neighbouring Cambo oilfield, if Rosebank is developed it would produce more emissions than 28 low-income countries combined, or the carbon dioxide equivalent of running 58 coal-fired power stations for a year. It is estimated that if it is developed, its owners would receive more than £500 million of taxpayer subsidies, as the hon. Lady said, thanks to the investment allowance—the gas and oil giveaway—in the energy profits levy. If that £500 million were not used for those subsidies—subsidies to burn our planet more—it could be used to extend free school meals to every child whose family receives universal credit. It could be used to pay the annual salaries of more than 14,000 nurses or build one new medium-sized hospital. It is genuinely baffling that the Government think that that is the best use of £500 million at any time, let alone now.
The Minister may try to argue that the development is required because the UK will continue to need gas in the future, but he knows as well as I do that 90% of Rosebank’s reserves are oil, not gas, and that it is likely to be exported, given that that is the fate of 80% of the oil that is currently produced in the UK. There are currently more than 200 oil and gas fields already operating in the North sea whose production would be entirely unaffected if Rosebank were not to go ahead, so this is not about immediately turning off the taps, as Ministers like to suggest. It is not legitimate for the Government to justify new oil and gas licences by saying they are needed. That does not reflect the reality of the situation. I know that, and I think the Minister does too.
It is patently clear that a crisis caused by gas cannot be solved by more gas. As the International Energy Agency clearly states in its “World Energy Outlook 2022”:
“No one should imagine that Russia’s invasion can justify a wave of new oil and gas infrastructure in a world that wants to reach net zero emissions by 2050.”
As a first step, the Government must scrap the so-called gas giveaway—the huge subsidy to the climate criminals who have benefited from Putin’s illegal war. Next, they must urgently work to end the age of fossil fuels for good, because time is not on our side. The Environmental Audit Committee report, which has been referred to, recommended that the Government consult on setting a clear date for ending new oil and gas licensing rounds in the North sea. Given that we are, in the words of the United Nations Secretary-General, António Guterres,
“on the highway to climate hell with our foot still on the accelerator”,
personally I think the time for consultation has gone. Will the Government explain exactly how new oil and gas licences are compatible with limiting global temperatures to 1.5°, when there is overwhelming evidence to the contrary?
The Climate Change Committee noted:
“An end to UK exploration would send a clear signal to investors and consumers that the UK is committed to…1.5°C.”
Furthermore, now that the Government have resurrected the Energy Bill, will the Minister use this opportunity to legislate for an end to the maximising economic recovery duty—a woefully outdated obligation to maximise the economic recovery of petroleum, which can have no place on the statute books of a country that has any real climate ambition? Instead of that duty to maximise the economic recovery of petroleum, will he look at the need to effect a real, just transition for workers and an orderly managed decline of the oil and gas industry? Will the Government also fully harness the potential of renewables, which at the latest contracts for difference auction were at least nine times cheaper than gas?
I welcome the concessions on onshore wind made in the Levelling-up and Regeneration Bill, but the Minister will know that a number of barriers still remain, not least the lack of targets and the strategy for this cheap and popular form of energy. Will he now also address those issues?
Philip Dunne
The hon. Lady is being generous with her time. I may pre-empt what she was about to come on to. In concluding her remarks on alternative renewable energy sources, will she commend to the Minister the work the Government have already done in allowing contracts for difference to be available to tidal energy systems, to provide renewable baseload electricity supply, which at the moment is a critical shortcoming in the plans?
Caroline Lucas
I certainly welcome that intervention and agree entirely on welcoming the use of the contracts for difference mechanism. Tidal has huge potential and that is one way to maximise that. As the right hon. Gentleman knows, we will be looking this afternoon in the Environmental Audit Committee at ways in which we can unblock more solar power, for example, by enabling the batteries, alongside household solar, to be installed retrospectively at lower VAT rates. It is odd that, at the moment, there are reductions on VAT for solar panels but not for the batteries for households that want to store energy.
Wera Hobhouse
On that point, does the hon. Lady agree that the Government should seek to incentivise further private domestic installation of solar panels or ground-source heat pumps by considering an offsetting of the investment against income tax?
Caroline Lucas
I thank the hon. Lady for that proposal, which is not one I have looked at, but which sounds interesting. I would be interested to know what the Minister thinks of that.
I will bring my comments to a close simply by saying that, in responding to the multiple crises that I have set out this morning, it is important that we do not store up more problems for the future. Rather than harking back to the fossil-fuel era, I ask the Minister one more time if he will finally prioritise the quickest and cheapest way to bring down bills for the long term, and introduce that desperately needed street-by-street home insulation programme. Again and again, we have seen Government schemes that are not working. The green deal scheme and green homes grant both collapsed and did massive damage to supply chains, with businesses unable to have confidence in what the Government were introducing.
We urgently need an end to the fossil-fuel era, which was kickstarted by coal and colonialism. Instead, we need resilience for the long term, with good green jobs in every constituency, warm homes that are not vulnerable to global gas prices, and the abundance of renewable energy with which these nations are blessed. Only then can we avoid future energy crises, create a more prosperous society and ensure that everyone shares in a transition to a zero-carbon economy.
Sir Robert Syms (in the Chair)
I remind Members to bob if they wish to be called in the debate.
Several hon. Members rose—
Sir Robert Syms (in the Chair)
Thank goodness, they are. I call Derek Thomas.
Derek Thomas (St Ives) (Con)
Thank you, Sir Robert. I commend the hon. Member for Brighton, Pavilion (Caroline Lucas) for securing this worthwhile and vital debate. It comes after a year in which the Government were exercised about how to address the cost of living and reduce the demand for energy in our homes. I think we have the solution here, in this room. I hope the Minister is listening carefully because I know he wants to do some great work while in post.
Everyone here, as well as the Government, knows that an effective way to reduce demand for fossil fuels, reduce both cost of living pressures and the demand for energy more generally is to improve the efficiency of our homes. I represent St Ives and when I was elected as an MP in 2015 I was told I had the leakiest homes in the UK, possibly in Europe. That came at the time of the Paris climate agreement, when we ratified our commitment as a nation to improve all our homes to EPC grade C by 2030.
I had a discussion yesterday with someone who has done research on how much my constituents pay for energy compared with other parts of the country. Part of my constituency is the most expensive place to live in the country because of the energy used and its cost, so this is urgent. I have raised that a number of times during my time as an MP, and I believe the solution is nowhere near as difficult as we make it out to be.
The Prime Minister would be interested in this topic because fuel-poor homes work against the vision that he set out on 4 January. The hon. Member for Brighton, Pavilion referred to the fact that there was no mention in his speech about energy and so on, but he did talk about attainment, and we know that fuel-poor homes hold back attainment. He talked about the pressure on the NHS, and we know that fuel-poor homes contribute to poor health and wellbeing and increased demand on the NHS and social care. He talked about inflation and people’s incomes, and we know that fuel-poor homes absorb disposable income from the families that we have described in the past as just about managing, and we also know that fuel-poor homes reduce the availability of homes to rent. I will talk later about why that is.
Before the UK ratified the bold commitment to get homes up or down to EPC rating C, the need to retrofit homes was well documented and well understood in this country. ECO—the energy company obligation—and green deals have, as we have heard, helped in a significant number of homes, but those are often the low-hanging fruit, the ones that are easiest to do, but there are others, such as homes in my constituency and other rural areas, that need a much more deliberate focus. I ask the Minister to consider how this year can be spent on a more focused and determined way to impact on this huge problem.
The rocketing cost of energy to heat our homes must bring this vital issue to the forefront of the Government’s mind. As we have heard from my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, work will be done to help people to reduce the energy demand in their homes. I hope that that includes a determined effort to understand how we can do that effectively, quickly, and without wasting huge sums of money on subcontracts. A company in Scotland, for example—I do not wish to pick on Scotland; this is an example that relates to Cornwall—will secure a huge Government contract and then identify companies further down the food chain to deliver the contracts, but, unfortunately, not very well. We had a huge problem with that, with the £2 billion that the Government announced during the covid time to address problems with our homes. We need, as has been suggested, a grassroots, street-by-street approach, perhaps local authority-led, to identify what can be done to improve the efficiency of the home and then get on and do it while making sure that the money is spent exactly where it is intended to be spent.
I do not intend to speak for long, but I want the Minister to consider the Government’s approach to improving our leaky homes. I am happy to suggest a pilot in Cornwall. The council has already suggested a pilot and has identified how much it would cost. It is quite a lot of money, but it would be good to test the water to see if that can be achieved.
Can the Minister say any more about what the Government plan to do to help us reduce the energy demand in our homes? Will that include support to retrofit and improve the efficiency of our homes? Can he update the House on plans to modify the EPC rating? I led a debate last summer on the problem of affordable housing and why in Cornwall, although this will be true elsewhere, the energy performance certificate drives landlords to flip their homes from long lets to short-term lets—not because the law does not apply to a short-term let, but because it is not properly enforced, whereas it is much better enforced for long lets.
The problem is not that people do not want to improve the efficiency of their homes, but the tool we ask people to measure their homes by is often a case of “computer says no”. It does not truly achieve what we are trying to achieve, which is to improve the efficiency of our homes and reduce costs. The current methodology around EPCs is flawed. BEIS agreed last summer to review the methodology and look at how we can improve that, so what progress has been made? If the Minister cannot tell us today, perhaps he will follow up with a letter.
We know that fuel-poor homes drive out the availability of long lets. That is exactly what is happening across Cornwall. We are still seeing landlords who cannot achieve EPC rating E, let alone C, so they are having to use the house for other purposes. That needs to be addressed, and quickly.
Philip Dunne
I thank my hon. Friend for allowing me to intervene during his excellent speech. On the subject of EPCs, in his constituency has he seen what I have discovered in my constituency? When a social landlord is faced with renovation costs to make their property legally lettable at EPC rating E, they discover that the cost is too great and consequently propose to sell the property and evict the social tenants. This is happening in a small village community where there is no alternative provision.
Derek Thomas
That is exactly my experience, and it has been my experience for a number of years. It is tragic. Our parish council contacted me in desperation because it fought long and hard many years ago to identify sites to build and set aside such homes, only to find that they are lost, partly for that reason. As a result, villages are being hollowed out, making it difficult to keep open the post office, the GP surgery and the local school. We should not reduce our ambition to improve homes, but there is an urgent need to understand how we can do that and fund it.
That is the experience I have had in parts of my constituency and it concerns me greatly, but I am not critical of social landlords. When I left school I learned to build homes. I built homes with blocks, cement and sand, and today lots of homes are built in exactly the same way. The insulation being put in has improved, but we are making nowhere near enough carbon-neutral homes. We can get there and there are better ways of building, but the building trade has not moved on enough to catch up with what is needed, but perhaps that is a subject for debate another day.
To touch on the problem of listed buildings, in Cornwall—I am not sure if this is true elsewhere—we are working hard to improve the quality of our homes, many of which are listed buildings or are in conservation areas. Property owners often request double glazing. Although it is now possible to get double glazing that is in keeping with such buildings, the flat answer is that it cannot be done, so we are retrofitting homes but not installing double glazing in homes that badly need energy efficiency measures.
Will the Minister provide guidance to local authorities, and perhaps even to the Department for Levelling Up, Housing and Communities, about things that can be done to improve the quality of those homes? We need a better understanding of modern methods that can be used to achieve homes that people can live in while retaining their beauty, rather than simply saying, “No, that cannot be done. You must spend a huge amount of money replacing your windows with windows that are exactly the same and no more efficient.”
Finally, will the Minister consider setting up a taskforce to look at the barriers to households installing renewable energy and storage infrastructure? Are those barriers the cost to the household, the red tape put in place by the power distributors or the restraints of the national grid? I am constantly meeting people who are frustrated because they want to put infrastructure in their homes, farms or businesses, but reasons are given about why that cannot be achieved or the sheer cost is too great. Will the Minister look urgently at setting up some sort of taskforce to get to the nub of the issue, in order to unlock the potential for renewable energy in individual homes? That will address the cost of heating and energising those homes, as well as reducing the impact and use of fossil fuels.
Cat Smith (Lancaster and Fleetwood) (Lab)
It is a pleasure to serve under your chairmanship, Sir Robert. I congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing this incredibly important debate.
In common with the hon. Member for St Ives (Derek Thomas), I seek reassurance about the many homes in my constituency that are in conservation areas. I share his frustration about the “computer says no” approach to the installation of double glazing, which I have certainly come across in Lancashire. From Lancashire to Cornwall that is definitely an issue, and Government intervention could help a lot of families make their homes more energy efficient.
I will begin by talking about the Prime Minister’s grand five promises, which he made at the beginning of this month. I was incredibly surprised and disappointed that the environment did not really get any kind of mention, and I thought it was quite irresponsible to prioritise the stopping of small boats crossing the channel over climate change. Perhaps the Prime Minister has not heard, but the latest prediction is that we will have over 1 billion climate refugees by 2050, so constantly chasing the consequences rather than the causes is always going to be to the detriment of progress.
The Government have managed to use the war in Ukraine and the pandemic to absolve themselves of responsibility for the energy and cost of living crisis. There is no doubt that those events have exacerbated the situation, but the underlying causes of the crisis have been brewing for a very long time. As the hon. Member for Brighton, Pavilion said, the Government have had 12 years to build up our energy security and transition towards a net zero economy, but instead, they have espoused the rhetoric of commitment while not doing any of the things necessary to actually make that happen.
There are very obvious solutions, which have been stressed in this debate. Household insulation, for instance, has been shown to be an effective and efficient way of lowering energy demand and improving energy security, yet the Government have scrapped their campaign to insulate homes just six months after its inception. Now that the energy crisis has categorically proven the necessity of transitioning to net zero, the Government plan for 130 new licences for North sea oil and gas. That decision is already being challenged in the courts as being unlawful and incompatible with the UK’s international climate obligations. The UK cannot claim to be an international leader on the climate crisis while moving back towards fossil fuels: this simply proves the falsity of all Government promises on climate action.
Many of my constituents—I am sure other Members will agree—have been writing to me in opposition to Government plans to approve the Rosebank oil field. Quite rightly, they view it as a complete betrayal of our climate goals and responsibilities to the planet. When I wrote to the Government on this matter, the letter I got back from the Minister justified the use of additional oil and gas fields on the basis that a decline in domestic production would require us to import more oil and gas, but—as was eloquently said by the hon. Member for Brighton, Pavilion—most of the gas from Rosebank is actually going to be for export. Given the wealth of evidence about the potential for clean energy sources to meet our energy needs, I find that response incomprehensible.
In my time in this House, I have frequently made the case for renewable energy projects in my own constituency, including tidal energy on the River Wyre. A barrage is proposed between Fleetwood and Knott End, which would be able to produce energy locally, and we have a number of great academics at Lancaster University who are working on renewable energy sources and have lots of good ideas about how we in Lancashire can be part of that energy solution. The only possible explanation for moving in the opposite direction to common sense is that a powerful few in the Conservative party are set to benefit from the expansion of fossil fuels, keeping Britain stuck in the past, rather than leading the future.
The Government response to the energy crisis has been short-term financial support. While that is necessary, it does absolutely nothing to address the root causes of the problem, nor to equip the country for success in the future. We need urgent investment in renewable energy to create the green growth that can save money on bills, while also equipping us for a future without oil and gas dependencies.
Wendy Chamberlain (North East Fife) (LD)
Apologies, Sir Robert, for missing the start of the debate. The hon. Lady is making a very powerful speech about the contradictions that we are seeing in the Government’s policies. I felt that very strongly during the energy statement regarding support for businesses, in that I have a business in my constituency that is very keen to make energy savings and efficiencies, but those projects are capital hungry, so without support to make those green investments, that business cannot move away from its dependency on fossil fuels. Does the hon. Lady agree that the Government are being incredibly short-sighted on this issue?
Cat Smith
Absolutely. I was present for that statement earlier this week, and the point that the hon. Lady raises about businesses struggling to make their premises more energy efficient ties in with all of this. Just before I went into the Chamber for that statement, I received my energy bill for my constituency office, which is in a very poorly insulated building on Lord Street in Fleetwood. My prediction is that my energy bill will increase fivefold in the next year. I am sure that colleagues in the room will realise that the budgets we get from the Independent Parliamentary Standards Authority are not the most generous in terms of being able to deliver a shopfront constituency office, and the price rise will put me in a very difficult position going forward.
Returning to the matter at hand rather than the challenges with my office budget, the support that the Government have needed to give has been quite poorly delivered. I want to speak on behalf of many of my constituents, because I have asked the Government numerous times for exact details and dates of the energy support payments for those living in park homes, marina boats and canal boats. The first response was, “In due course.” Then it was, “This winter.” The latest response was, “From January.” I soon expect the answer will be “February”, and the payments will come to an abrupt end in April. Promises of future payments do very little to placate the real needs and concerns of those who are struggling now.
High energy prices are also driving record-high inflation. The public and the planet are bearing the cost, while the oil companies are still making record profits. People can see it and they do not like it. We all know that lower-income households are the most affected by price rises, and we have seen appalling reports on the record use of food banks and the rising levels of destitution. It is a policy choice not to treat increasing poverty with the serious concern and action that it warrants, and I have been contacted by a number of constituents with particular concerns about children growing up in poverty. We need to invest in these children and provide them with the urgent support they need now, while creating a future of sustainable jobs and clean energy to ensure that their children do not end up in the same cycle.
It is often the poorest of my constituents whose homes end up being flooded when we see extreme weather events. Standing in people’s flooded living rooms when they have lost so many personal possessions, and holding them as they cry, has been one of the most difficult things I have had to do as a Member of Parliament. It is not something I expected to do when I was first elected in 2015, but the reality is that, with the increase in extreme events, it is something that I am likely to have to continue to do going forward. Indeed, we had a yellow weather warning for rain in Lancashire yesterday. Thankfully, I have not yet had any reports of any homes being flooded, but roads are certainly flooding at the moment. It is a consequence of our failing to tackle the climate emergency that is unfolding.
The Government are pursuing a strategy that accelerates climate change, harms our environment and does nothing to meet people’s energy needs and help them with the cost of living crisis. There are some very obvious solutions that have been put forward in this morning’s debate, and I hope that the Minister is open to considering making this a priority for his Government, meeting people’s cost of living crisis and stopping the climate emergency.
Sir Robert Syms (in the Chair)
We now move to the Front-Bench contributions. I call Peter Grant.
Peter Grant (Glenrothes) (SNP)
Thank you, Sir Robert. I am pleased to begin summing up in this debate, and I commend the hon. Member for Brighton, Pavilion (Caroline Lucas) again for securing it and for her measured but still passionate and, as always, very well-informed introduction.
I have not heard very much in the debate that I disagree with. I might not entirely agree with everything said by the hon. Member for St Ives (Derek Thomas), but he used a very small and localised example to highlight what is possibly the biggest elephant in the room: if we think that we will tackle climate change and that everything else will continue in the way it always has, we are deluding ourselves. It is not going to happen. The hon. Gentleman explained how the social rented housing market is being disrupted because of steps being taken to improve the efficiency of buildings. We can argue about where we balance the various different needs—including the need to provide housing of some kind, and the need to make sure that housing is properly insulated—but we will not tackle climate change if we leave the way we do housing exactly as it is now. It is going to have to change. We will not tackle climate change if we continue with the transport provision that we have now. Far too many of us—me included—feel that we cannot do our job without flying regularly, but that will have to change.
The first thing that the Government have to do on climate change, which they have failed to do almost since the phrase was first used, is to start being honest with people and say, “Tackling climate change will hurt. It is not going to be easy, and it is not going to be cheap, but the alternative is even worse.” Far too often, the Government and their colleagues in the Opposition in Scotland seem to want to make people believe that there is a dead easy, quick-fix way out of everything—“If we vote for Brexit, everything will be great”; “If we vote for one Prime Minister after another, everything will be great”; “If we could just stop the boats coming across the channel, there will be plenty of jobs and money for all the people already here.” None of that is true. None of the significant issues that the Government have to face up to have quick and easy solutions. The Government need to start being honest with people and say, “If we are going to be serious about addressing climate change and fixing an energy market that is not fit for purpose, it will not be easy or comfortable.” It will be extremely uncomfortable for some of their pals in the City of London, and that is maybe where they need to start focusing their attention.
I represent a constituency that was one of the most important economic drivers of the United Kingdom and, indeed, the empire—to our eternal shame. It was one of the most important coalmining constituencies in the United Kingdom. Methil docks used to be one of the biggest coal exporting ports anywhere in the world. That is all gone. A lot of the traditions and heritage that went with coalmining are still there, but coal has not been dug out the ground in Fife for many decades. The constituency also played a major part in the oil and gas industry. The fabrication yard, known as RGC in those days, was a major source of the infrastructure for North sea oil and gas.
Both of those energy booms created billionaires by today’s standards. Very little of the benefit stayed in my constituency. We would not need to spend much time walking through places like Methil and Buckhaven to realise that the economic benefits of the oil and gas boom and the coal boom went elsewhere. The benefits certainly did not stay with the people who lived, worked and, in too many cases, lost their lives to make those industries effective. However we change the way we do energy in these four nations, we need to ensure that the benefits that come from being an energy-rich nation go to the people. I do not just mean a few directors in boardrooms; I mean the people who actually helped to produce that massive wealth.
The crisis we are facing has not just happened because Putin invaded Ukraine last year or because he invaded Ukraine in 2014—although perhaps if the UK and their allies had not turned the other way in 2014 and had stood up to Putin then, the most recent invasion might not have happened. The energy crisis and the cost of living crisis are a result of decades of long-term failure. It is now creating a day-by-day crisis. People are freezing in their homes today, so we cannot wait 25 years to come up with a strategy to fix that. There needs to be significantly more emergency help going to people now. We need long-overdue recognition that our entire energy system—from the way energy is produced, distributed and supplied to the way the price is controlled, or not—is not fit for purpose. None of it is working to the benefit of our constituents. It is not working for the people who rely on it most and the people who cannot afford 100% or 150% increases in their fuel bills.
Once this—I hope—short-term crisis has been addressed, we need to start looking at what we can do to change the energy market so that this can never happen again. Why is it that in a country such as Scotland, which produces 85% of its electricity need without gas, the change in gas prices has such a disastrous impact on electricity prices in Scotland, when very few of my constituents use electricity that has ever been anywhere near a gas field? Why is it that in a country such as Scotland, which exports more gas than it imports, when the price of gas goes up, our people get poorer? That does not make sense. It does not make economic sense, and it certainly cannot be morally or ethically defended.
Since 1990, the Scottish Government have delivered a reduction of well over 50% in our CO2 emissions. We are more than halfway towards net zero. Clearly, the second half of the journey will be more difficult. They are doing that by accepting, and they formally accepted this in an announcement made over the past day or two, that oil and gas are not the future. There is now a presumption in Scotland against any further exploration or development of oil and gas facilities. There are still significant potential economic reserves under the North sea, but the Scottish Government have taken the decision that the price to the planet of exploiting those reserves is just too high. It does not take a genius to work out that that is not an easy thing for the Scottish Government to say. It has not been an easy decision to take, and it will not be universally popular in Scotland, but it is the kind of hard decision that we have to be prepared to take. We have to be prepared to say that there are times when the economic benefit or certainly the short-term economic benefit, of exploiting those oil and gas reserves will be outweighed by the longer-term damage that that does to the planet and, ultimately, by the longer-term economic harm that that causes.
I will give an indication of how severe the energy crisis has been in Scotland. Between 1 and 18 December last year, the Scottish Ambulance Service answered 800 999 calls from people with hypothermia. Eight hundred people in Scotland were admitted to hospital because they were literally freezing to death. That is in a country that has more energy than it needs. How can it be allowed to happen? How can it possibly be justifiable? I will put that figure of 800 people into context. At the moment, and as in England, Scotland is seeing probably the highest levels, or certainly among the highest levels, of covid hospitalisations that we have had, almost at any time, and exceptionally high levels of hospitalisation with influenza. About 1,600 or 1,700 people in Scotland are in hospital with either flu or covid; and in the space of 18 days, we sent another 800 people in because they were freezing to death. That is the extent to which the climate crisis, the energy crisis, is putting additional pressure on an NHS that does not need additional pressure put on it. As well as the sheer inhumanity of allowing people to get to a stage where they are in danger of freezing to death in their own homes, there is a knock-on impact on public services that are already under enormous pressure.
I can predict what the Minister will say. I can certainly predict what he came into this Chamber intending to say; I do not know whether he will have changed his answer after listening to any of the arguments made today. The Government will blame the Russian invasion of Ukraine. Yes, that has had an impact, but it has not had as big an impact as the Government might try to pretend. The United Kingdom does not depend on Russian oil or gas to anything like the extent that some other countries do, and those other countries are not faring any worse than we are.
The Minister might well throw the barb that was very popular on the Tory Benches towards the end of last year—that this is all the SNP’s fault because we will not allow any more nuclear power stations in Scotland. But apart from the fact that if we started planning and building a nuclear power station today, it would not help the 800 people who were hospitalised in December, or the 800 who might be hospitalised later this month if there is another cold snap, the Scottish Government’s opposition to nuclear power is because of two facts. In Scotland, we do not need it; and it is by far the most expensive form of energy that this country or these four countries have ever used.
Therefore, I hope that the Minister will not demonstrate what I think the hon. Member for Brighton, Pavilion described as the previous “obsession” with nuclear power. Nuclear power has never been the answer. It is certainly not the answer now. As I mentioned in an intervention, there have been times when it has been shown that if, rather than building a nuclear power station, we had spent the money insulating people’s homes, we would have got more energy out of it. That is not sexy, and it does not make anyone look clever in the eyes of the United States if they can say that they have the best insulated homes anywhere in the world, but economically it makes a lot more sense than building nuclear power stations. At the moment, we still literally do not know how much it will cost to decommission the ones that we already have, so why on earth would we start to build any new ones?
I congratulate the hon. Member for Brighton, Pavilion on initiating this debate. A great deal more could be said on this issue. I have no doubt that on a different day, or possibly if we had been able to get time in the main Chamber, a lot more Members would have wanted to speak. My single request to the Minister, and the message that needs to go back to the Government about the issue, is this: start being honest with people about where the energy crisis has come from, because if we are not honest about what has caused the crisis, we will never get any closer to finding answers to it. I do not want to see another 800 people in Scotland at risk of freezing to death next time there is a cold snap. But at the same time, when I move on from here, I want there to be a world left that is fit for all our families and all our constituents’ families to continue to inhabit for a hundred years to come. If we continue going the way we are just now, that cannot be guaranteed.
Kerry McCarthy (Bristol East) (Lab)
It is a pleasure to see you in the Chair, Sir Robert. I congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing the debate. This is certainly not a one-off debate on this topic; it is something that affects us all as constituency MPs, as well as being very much about the underlying issue of what we do to tackle the climate crisis.
The hon. Member reflected that very well. She talked about the global fight and the fact that weening ourselves off fossil fuels is key to tackling many of the problems that have been flagged up today, but she also got down to detailed issues affecting her constituents. She talked about the forced installation of prepayment meters by court warrant and the consequent rise in self-disconnection. I am interested to hear the Minister’s response on that issue, because many of us are concerned about it.
The hon. Member for St Ives (Derek Thomas) also talked about specific issues in his constituency, including retrofitting homes. Again, I am interested to hear the Minister’s response to the hon. Member’s criticisms of the energy performance certificate regime and its impact on the letting market in Cornwall. I will come on to retrofitting homes that currently do not meet standards, but another issue is that we are still building homes that do not meet standards. Since about 2016, more than 1 million homes have been built that do not meet standards. That seems ludicrous, and I hope the Minister will address that.
My hon. Friend the Member for Lancaster and Fleetwood (Cat Smith) talked about the impact on people living in park homes and conservation areas—how it is not always easy for them to adapt their homes and how sometimes the cost is far greater. I thought that reflected just how good a constituency MP she is. Before the debate started, we were talking about farmers as well.
The most powerful thing that evoked memories for me was when my hon. Friend talked about the floods in 2015 and 2016, when she was a newly elected MP. As the then shadow Environment Secretary, I visited the constituencies of other newly elected Labour MPs, including my hon. Friends the Members for Halifax (Holly Lynch) and for York Central (Rachael Maskell). I saw the devastation that those floods caused for families. In Halifax, they had been told that the floods a few years earlier were a once-in-a-century experience, and that they would never see flooding like that again. They showed me the marks on the wall to show not just that the floods had happened again, but were worse than before.
A few years prior to those floods, we had floods on the Somerset levels. Again, it was seen as an almost freak event. Oliver Letwin was given—as he usually was—a taskforce to chair that was going to bring up all the answers. Then, of course, it dropped off the agenda when we had a few years without floods. My hon. Friend the Member for Lancaster and Fleetwood was quite right to warn that we should not be complacent. That there is a constant fear that flooding could return, which is very much connected with the climate crisis.
My hon. Friend also pointed out the Government’s ludicrous argument—I know the Minister is fond of this—that domestic fossil fuel extraction is somehow a green measure. I think he also tried to claim the same about fracking during that infamous debate when we were going to frack and then not frack, and when it was a vote of confidence and not a vote of confidence. The idea that we can get around fossil fuel emissions by claiming that there are no transportation costs associated with imports is silly, especially when much of what is produced will be exported. My hon. Friend did flag that up.
Returning to the opening remarks from the hon. Member for Brighton, Pavilion, she said that last year was very much dominated by soaring energy prices and a worsening climate crisis. It exposed our reliance on dirty and volatile fossil fuels. Gas prices soared to 10 times their level in the first half of 2021, meaning that the price of gas was nine times higher than the cost of cheap renewables such as wind and solar. That is an important message to get across to people. Renewables are not the expensive option any more; they are way cheaper than the fossil fuel route.
As has been said, the Minister will mention the illegal war in Ukraine. Of course, that was a major factor, but it does not explain why leading economists are predicting that the UK will face one of the worst recessions and the weakest recoveries in the G7. According to the OBR—the previous Chancellor and Prime Minister were keen to avoid telling us what the OBR thought, and now we know why—the UK has already fallen into recession and is facing the biggest drop in living standards since records began. The reality is that we simply were not prepared for the energy shock that we saw last year, partly because we have had years of wasted opportunities to develop cheap, clean and renewable energy sources and to wean ourselves off fossil fuels.
Instead of a green sprint for renewables, the Government launched a failed attempt to bring back fracking, so that they could extract the most eye-wateringly expensive gas without considering the wishes or safety of our local communities. The Government issued more than 100 new licences for expensive and polluting oil and gas extraction. On top of that, they attempted to ban new solar developments and keep the ban on new onshore wind, which would have blocked the cheapest available forms of energy.
I know that there have been U-turns on quite a lot of that—although it is difficult to keep up sometimes—but ordinary households are now paying the price for the dithering, delay and years of inaction on renewables. New research suggests that households could have saved £1,750 a year if the Government had moved faster to reduce emissions through support for renewable energy, energy efficiency upgrades and other green investments. For the 9 million households now living in fuel poverty, that £1,750 could have made a world of difference.
Labour led the way in calling for a windfall tax in January last year. The Prime Minister, who was then Chancellor, was pretty reluctant to introduce one. Eventually, he brought in a half-hearted measure, but even then, oil and gas giants avoided paying fair taxes due to the huge investment allowance loophole that was snuck into the tax. I read recently that Shell is paying taxes this year for the first time in something like five years. Clearly, something is very wrong. The loophole, which applied only to polluting fossil fuels and not to cheap renewables, allowed fossil fuel companies to avoid paying any windfall tax on 91p of every £1 they made.
The Chancellor has now confirmed that support with energy bills will reduce from April next year. That means that households, many of which are already at breaking point—not just because of energy bills, but because of increases in rent, mortgages, food prices and interest rates—are expected to suffer another increase in energy bills from April.
Labour has been clear that the only solution to the cost of living crisis is a green one. We talked a bit about retrofitting homes; it is estimated that 9 million homes could have been insulated since the Government scrapped home insulation support schemes in 2012, a decision that is now costing households up to £1,000 on their annual energy bills.
Yesterday, I met a range of people involved in the housing sector, from people running housing associations to people from building societies. They are crying out for certainty. They want to invest in retrofitting loans, green mortgages, or whatever we want to call them, and they want to renovate properties. We have seen an absolute shambles from the Government over the past decade or so, with things such as the green homes grant being dropped and cowboy builders moving into the market. Unless the Government provide certainty, consumers and the companies that will need to deliver the retrofitting programme will not have confidence. We need a clear sense of direction. That is why Labour has promised a decade-long programme that would invest in insulating 19 million homes, with £6 billion invested over that decade to give that sense of certainty.
Labour would also double down on cheap, clean renewable energy through our pledge to achieve a clean power system by 2030. That would mean doubling onshore wind capacity, tripling solar capacity and quadrupling offshore wind capacity. We would achieve that goal by establishing a publicly owned renewable energy generator, GB Energy, so that the profits of those investments actually benefited the British public.
That is a clear, long-term strategic plan. We are not hearing anything like that from the Government. I hope that today we will hear a serious response from the Government setting out not just how we will tackle the cost of living crisis in the short term and help people with their energy bills, but how we will put fossil fuels to bed once and for all and support the sprint towards green energy.
The Minister for Energy and Climate (Graham Stuart)
I congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing this important debate and I thank the other hon. Members who have taken part for sharing their constituents’ thinking on fossil fuels and the cost of living.
However, listening to quite a lot of the contributions to the debate, I felt as if we were in some sort of parallel universe, away from the reality of the world we live in today. Three quarters of our energy comes from fossil fuels. That is the reality now. The cost of living crisis is driven by a global shortage of fossil fuels, which is driving up their price. We are moving faster than any other G7 country to decarbonise, which no one would have understood from listening the contributions from those on the Opposition Benches. We led the world in passing legislation for net zero, and in putting in place the Climate Change Committee and the rest of it to keep the Government honest on the route to getting there, which is a tough one.
The reality is that this economy, like every developed economy, is dependent on fossil fuels today, and it will be all the way through to 2050 on net zero, when we will still be using a quarter of the gas that we use today and we will still need oil products. That is the context, which people just absolutely would not have got a glimpse of from the contributions by Members on the other side of the Chamber today. We heard them all pat each other on the back on their ideological opposition to nuclear and their objection to a source of baseload energy that is clean—for what reason? We heard an absurd world view, co-ordinated between the SNP, the Greens and His Majesty’s Opposition. Frankly, it is bizarre. Get real about where we are actually at.
To talk, as the hon. Member for Glenrothes (Peter Grant) did, about the crisis and its impact on the most vulnerable people in his constituency and not be honest about the context or the need for oil and gas in the meantime, and not to engage with the fact that producing oil and gas from our own waters with ever-higher efforts to reduce the emissions from that production, is simply wrong. And for the hon. Member for Bristol East (Kerry McCarthy) to say that it is laughable to suggest that burning domestically produced gas with much lower emissions attached to it, when we must burn gas and we will be doing so under net zero in 2050, is somehow not the right thing to do is, again, frankly absurd.
I hope to return to my actual speech, but I must address the reality of the impact on ordinary people and the most vulnerable. Those people are ill-served if we do not recognise the actual realities of the economy and society that we live in today and, instead, just pose to the public in a kind of virtue signalling.
The hon. Member for Lancaster and Fleetwood (Cat Smith) totally condemned every action by this Government, as though nothing the Government have done has helped in the journey to net zero or in tackling climate change. This Government have done more than any other and taken action on the woeful situation on energy efficiency in homes. We are still way behind where we need to be, but where were we in 2010? I will tell people where we were: just 14% of homes had an energy performance certificate of C or above. If people want something risible or laughably poor, that is it. What is that figure today? Forty-six per cent. We heard nothing but condemnation from the hon. Member for Bristol East, who spoke for the Opposition, about the “shambles” of this Government’s policy. Well, under our policy, we have moved from 14% to 46%.
This Government are committed to setting up an energy efficiency taskforce—further details will be coming soon—precisely to deal with the points that my hon. Friend the Member for St Ives (Derek Thomas) was so right to raise. His contribution was grounded not in the unreal parallel universe presented by Opposition Members but in a real understanding of his constituents in Cornwall, their homes and the rules and barriers that stand in the way of those people being able to have more energy-efficient homes. Those rules and barriers need to be identified and removed to ensure that those people who can and will invest themselves to green their homes are better able to do so.
That is what we need—practical, focused, real and honest engagement with the challenges. People have to accept the wider context, and they have to recognise what this Government have done after the woeful performance previously, which can be seen in all the numbers. Where were we on renewables in 2010? Practically nowhere. Where are we now? Leading Europe. I did not hear that in a single contribution from the Opposition Members who say they care so much about this issue, but care insufficiently to share any of the vital facts.
Caroline Lucas
I thank the Minister for giving way. I want to say how utterly disappointed I am by the tone that he has taken. I think that we have all been pretty constructive this morning. We have given the Government credit where some progress has been made, but the Minister cannot stand there and pretend that either the green deal or the green homes grant were successful—we know that they were a disaster. He cannot keep going back to 2010 and suggesting that somehow history was frozen at that point. Any other Government would probably have done a hell of a lot more than this Government have since then.
The suggestion that we are virtue signalling, when we are the ones who are saying that our constituents are living in freezing homes right now—some are actually dying from hypothermia—in a country that exports more energy than it uses, is intolerable. Why is the Minister suggesting that we are on the wrong side when we say that gas is eight or nine times more expensive than renewables? That is what is hurting our constituents. Will he really stand there and defend the Rosebank oil development? That is for export; even if we do get more oil and gas out of the sea ourselves, it does not necessarily get used here, and Rosebank certainly will not be used here. Will he address that point and some of the other real points that we have been making this morning?
Graham Stuart
I thank the hon. Lady. The cost of living crisis is because of the global position on the price of gas, driven by supply and demand, as every market is. She speaks as if there is a switch, and a wilful failure by people in my position to press the button that ends all fossil fuel. We hear careless suggestions—“From your friends in the City of London to your friends in the oil and gas industry”—as if there is some button we have not pressed. That is not true. This economy, like every developed economy, is dependent on fossil fuels, and it is a transition to get out of that. Pretending it is not does not serve those people who are suffering as the hon. Lady said.
The Government are driving a reduction in our demand for fossil fuels, and we have achieved a lot on our road to net zero already. Between 1990 and 2019 we grew the economy by 76% yet cut our emissions by 44%, decarbonising faster than any other G7 economy. But oil and gas will remain an important part of our energy mix, and that needs to be recognised. People should not suggest that there is some button that we are wilfully failing to press. We cannot switch off fossil fuels overnight and expect to have a functioning country. If we do not have a functioning country, we will have more people who cannot afford to heat their homes properly. That is the reality, and I do not think that has been properly reflected by Opposition Members today.
Supporting our domestic oil and gas sector is not incompatible with our efforts on decarbonisation when we know that we will need oil and gas for decades to come. What is laughable is to suggest that it is somehow morally superior to burn liquid natural gas imported from foreign countries, with much higher emissions around its transportation and production, than gas produced here. Why would we want to do that?
Graham Stuart
There are 120,000 jobs, most of them in Scotland, dependent on oil and gas. I was delighted to witness the signing of a memorandum of understanding with three major oil and gas companies looking to decarbonise their operations west of Shetland and bring down their production emissions. Emissions from oil and gas production in this country—remember how fast it is waning—are still around 4% of our overall emissions. The idea is to incentivise companies that are massively taxed to invest in electrification of their production. We need oil and gas for decades to come. If we can, we should produce it here rather than import it from somewhere else, and we should incentivise and ensure that production here is as green as possible. That is why it is not incompatible.
Graham Stuart
We are a net importer of oil and gas, and we will continue to be. New licences simply help us manage a fast declining basin. Even with new licences, the production is falling by around 7% a year, and I think the IEA suggested that it needs to fall by 3% to 4% globally.
It is a bizarre argument made by the Scottish nationalist party. The hon. Member for Glenrothes is right to say that it is not popular. It is not popular in Scotland because it is insane. It does not make any sense for us to import oil and gas, because we are going to be burning it. There is no button to stop us burning it. If we are going to keep burning it, we should burn oil and gas that we produce here if we can, and we should incentivise our producers here to operate to the highest environmental standards. That is the right thing to do morally, for the environment and economically, and it makes sense. That is why the SNP’s policies, as re-announced this morning, are so completely out of kilter with reality.
Peter Grant
I am grateful to the Minister for finally giving way. I tactfully point out him that that he has seriously misrepresented the position of those of us on this side of the debate. Nobody is suggesting that we should turn off oil and gas production immediately. What we are saying is that we have to stop the headlong, insane rush towards more and more oil and gas production.
I also remind the Minister that his country is a big importer of energy and my country is a big exporter of energy. On that point, will he answer this question? How is it that a country that has more gas than it needs—a country that is an exporter of an increasingly scarce, and therefore increasingly valuable, natural commodity—is becoming poorer when something that we have an excess of has become more valuable?
Graham Stuart
As we know, the price of oil and gas has gone up, and hopefully it will go down again and become more affordable. Scotland is an integral part of this United Kingdom, which is why the hon. Gentleman is present in this United Kingdom Parliament. That is why we are in it together. That is how we are able to support Scottish households and families through the power of the Exchequer and the Treasury of this country, which, as he knows, provide much higher levels of public expenditure and support the Scottish nationalist party to take credit for every single penny spent, a large part of which is able to be spent only because of Scotland’s participation in this United Kingdom. We are in this together.
Hon. Members raised the idea that oil and gas firms are being subsidised, but we have raised the level of tax. I think £400 billion has come so far from the oil and gas companies. They are not being subsidised when we encourage them—
Graham Stuart
A reduction in tax from a level that is way above that which any other type of company pays in this country is not a subsidy, and anyone who suggests it is is dealing in semantics and not helping. Hon. Members can say they want to tax those companies higher, and they can say, “I absolutely do not want to encourage them to electrify their operations offshore and reduce the emissions around their production,” but they cannot say we are subsidising them.
Even when our net zero targets are met in 2050, we will still need a quarter of our current gas demand. As we have seen, constrained supply and dramatically increased prices do not eliminate demand for oil and gas. We will still need oil and gas, so it makes sense for our domestic resources to retain the economic and security benefits. Most importantly, hon. Members should look at what we are doing in the North sea basin. We are transitioning, but we will need all that offshore expertise. We need the engagement of the major oil players, which have now made commitments to their journey to net zero. We want them to produce the oil and gas that we will be burning for decades to come here in a green way.
We want to retain those 120,000 jobs. We want to retain the people with subsea and platform knowledge, because we will need that for carbon capture and storage, hydrogen and the transition to the green economy. Again, it is an absolute betrayal not only of the interests of those workers in Scotland and elsewhere but of our transition to suggest that there is a kind of brake. It is a transition, and we are moving through it. Thanks to the Climate Change Act and the carbon budgets, we are on track to reduce demand.
That is another point: hon. Members talk as if oil and gas exploration drives the world’s use of oil and gas, but it does not; the demand side does that. Petrol cars need to be filled, which is why we are encouraging electric cars. Methane-burning boilers demand gas, so we need to replace them with heat pumps and green our electricity system. It is the demand side that we need to focus on. I just think the whole conversation nationally has been focused on how oil and gas exploration drives usage, but it does not. Putting the price up massively and having a shortage does not massively drop usage because we are so dependent on this stuff. We are moving as fast as we can to get ourselves off that dependency, and we are leading the world in doing so.
Through our COP presidency, we have encouraged the rest of the world to follow us. Just 30% of global GDP was covered by net zero pledges in 2019, when we took on the COP presidency, and it is now 90%, so the world is following us. We are leading on those policies. We are a world leader in tidal, which was mentioned. I am delighted that we have now been overtaken by China in offshore wind, but we are the leader in Europe. We transformed the economics of it thanks to our contracts for difference—the mechanisms that this Government put in place. The truth is that this country has done comparatively a fantastic job. The data shows—notwithstanding the sometime mis-steps in energy efficiency—that, overall, our performance compared to what came before has been transformative,
I look forward to the energy efficiency taskforce, my colleague Lord Callanan, and a co-chair who will soon be announced taking these matters forward and listening to colleagues’ practical, proper suggestions on everything from getting the right balance between conservation and installing energy efficient windows to looking at issues such as solar installation on homes, planning and other aspects. We are working together on all those things and also ensuring that we take an holistic approach around our coast as we make plans and aim to ensure that we have a strategic spatial understanding of the North sea and its role in the transition.
This country is doing a fantastic job, and the vision for the future is that we should be an exporter of electricity. I hope to see us being an exporter of hydrogen. I see us as being potentially able to export, as it were, our carbon storage capability to our European friends and allies, and recently I was delighted to witness the signing of a memorandum of understanding on North sea co-operation with all the other countries involved in the North sea. That shows that we are working constructively with our EU allies.
On so many fronts, this country—and this Government, I am proud to say—is doing a brilliant job in leading the world in understanding the importance of getting to net zero, in tackling the reality of the transition from our dependence on fossil fuels, and on the need to keep producing those things in the greenest manner possible while doing everything we can to drive down demand, because it is the demand signal that we need to eradicate, rather than worrying about whether Rosebank, Cambo or anything else goes ahead. We have ensured through the climate change checkpoint that we look closely at that, and I am confident that our approach is compatible with the journey to net zero.
Caroline Lucas
Several of us around the Chamber have said that the vast majority of the energy extracted from Rosebank is for export, so will the Minister stop pretending that it will somehow address any of the crises that we face in the UK? He has painted a picture suggesting that none of us on this side of the Chamber has talked about the demand side. The vast majority of what all of us have been talking about has been energy efficiency, which is precisely about reducing demand. Will he start to address some of the points that I made in my speech, and which many other hon. Members did too?
For example, will the Minister address the issues around prepayment meters? Will he address whether there will be a much ramped-up energy efficiency programme? Will he address the questions I asked about how the £6 billion will be used? Will there be more money coming? Lots of questions have been asked in a constructive spirit—believe me, we could have been an awful lot less constructive if we had chosen to be—and I would be grateful if the Minister did us the courtesy of answering them.
Sir Robert Syms (in the Chair)
Order. The Minister will complete his concluding remarks and the hon. Lady will get a few minutes at the end of the debate, which I am sure she will wish to use.
Graham Stuart
To deal with prepayment meters, which the hon. Lady raised, Ofgem has rules in place that restrict the forced fitting of prepayment meters on customers who are in debt, except as a last resort, but prepayment meters do have a role to play in helping people to ensure that they do not go into debt. There are strong rules about that, and Ofgem is engaging with, and has done a review of the performance of, suppliers in supporting vulnerable customers and seeking to ensure that those suppliers fulfil their licence requirements.
In 2021, the Government published a progress report on the delivery of the EPC action plan. We aim to complete all actions by the middle of this year, following necessary amendments to legislation. That, to answer the point made by my hon. Friend the Member for St Ives, is in hand. On the issue that came up around warrants, clearly, the legal side of that is a matter for His Majesty’s Courts Service and the Ministry of Justice, but following the debate I will raise the matter with colleagues at the Ministry of Justice, ask them to look at it and go from there.
On the energy efficiency taskforce, we will come forward—I hope pretty soon, in answer to the hon. Member for Brighton, Pavilion—with the terms of reference, the membership and so on. Things will then become clearer. We do not want to prejudge how the taskforce will inform policy making in order to deliver the best use of the additional £6 billion, which I am sure Members welcome, in addition to the £6.5 billion being spent on energy efficiency in this Parliament.
I will make a final point and then sit down before you force me to, Sir Robert. We need top-down, we need the high-level policy and we need the funding. We have that from His Majesty’s Treasury, and we have the commitment on the energy efficiency taskforce, which has a positive role to play, but it also needs to look at how we galvanise the real will and desire there is across different parties running councils across the country, in different communities, to have a bottom-up approach to empower and enable communities and regions to do their bit to tackle net zero. A big focus of their work will be energy efficiency, understanding and surveying their housing and other building stock to come up with plans to build the required skills base, ensuring a career for people who enter that world. Through that, we can make a real difference.
At Government level, local government level and local community level working together we can accelerate the reduction in demand. Hon. Members did not mention the Chancellor’s announcement setting a target of reducing energy demand by 15% by 2030. I hoped that might have been commented on and welcomed; I certainly welcome that.
Caroline Lucas
I thank hon. Members for their contributions to the debate. I also thank the Minister, although for most of his response he misjudged the tone of the room. We were genuinely trying to find areas where we can move issues forward, particularly as they affect our constituents.
On energy efficiency, we know it is win, win, win. It gets people’s fuel bills down, addresses the climate emergency, creates jobs and, as many have said, it would also solve many of the health problems faced by people living in cold and damp homes. I hope the Minister will take away serious acknowledgement of the fact that the Government need to do more on that subject.
He prayed in aid the Climate Change Committee several times. It was that Committee that expressed regret last November that it was now too late to introduce policies to achieve widespread improvements in the fabric of buildings for this winter. On the points he made about fossil fuels, we are not going to agree but it would help if we spoke the same language. For example, the Minister spoke about us making up the idea that the Government subsidise fossil fuels. If he looks at the definition of a subsidy used by the International Monetary Fund and the OECD, he will find that what the Government do is classified as a subsidy. We can have that debate, but to suggest that we are simply barmy for suggesting that that is a subsidy is not helpful.
The Minister talked of our better standards when extracting our oil and gas. He will know that most of our imported gas comes from Norway, which has lower production emissions than the UK. A bit more honesty about the situation would go a long way. No one is suggesting that we turn off any switches or buttons on oil and gas overnight. We recognise that cannot happen. We also recognise that, for as long as the Government have a duty to maximise economic recovery of oil and gas, continue to subsidise oil and gas, and plan 100 new programmes in the North sea, the problem is exacerbated not addressed. I urge the Minister to look seriously at some of the proposals that many of us have put forward this morning and to act on them.
Question put and agreed to.
Resolved,
That this House has considered fossil fuels and increases in the cost of living.