National Emergency Plan for Fuel
Earl Russell Excerpts(1 day, 13 hours ago)
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Lord Whitehead (Lab)
The noble Lord conflates a number of different sources of fuel into one in his question. It is certainly the case, as far as petrol, diesel and other similar fuels are concerned, that supplies in the UK are stable. The UK as a refiner of petrol actually exports petrol from the UK, so there is no question of supply problems there. Only 1% of the crude oil that goes into petrol refining comes from the Middle East and only 7% of diesel comes from the Middle East so UK fuel supply is generally stable and secure. Jet fuel is slightly different as a higher percentage of it comes from the Middle East, but the airlines in the UK are clear that they are not currently seeing a shortage of jet fuel. Indeed, aviation fuel is typically bought in advance, and airports and their suppliers keep stocks of bunkered fuel to support their resilience.
Earl Russell (LD)
My Lords, the double blockade of the strait is still in place and shows no signs of easing. The national fuel emergency plan was last updated in April 2024, yet current pressures across aviation fuel, diesel and fertilisers are unique and complex. What consideration is being given to updating and stress-testing the plan? How will the Government balance timely information with avoiding panic? What steps are being taken to support early economy-wide fuel efficiency measures?
Lord Whitehead (Lab)
The noble Earl is absolutely right to point to the complexity of the situation at the moment, not just in terms of particular kinds of fuel supply but the knock-on effects of, for example, a lack of supply in the Middle East as a result of some refineries being bombed and long-term supply questions across the world about certain other fuels. The national emergency plan for fuel, however, is a plan for shortages of fuels, of which there are none at the moment in the UK.
The wider question is: what will happen as far as prices are concerned as this crisis develops, since we have no means of determining exactly when it will finish? That is not an issue for the national emergency plan for fuel, but it is one for the question of stabilising prices for consumers and ensuring that businesses are not at risk from those prices getting out of control. Indeed, as the noble Earl knows, the Government have already started taking initiatives in this respect. For example, £53 million has been distributed to cushion the effects of price rises in home heating fuel, which are particularly suffered by people who are off grid.
Clean Power 2030 Action Plan: Rural Communities
Earl Russell Excerpts(1 week ago)
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Lord Berkeley (Lab)
My Lords, it gives me great pleasure to follow the noble Lord, Lord Fuller, in discussing these various means of producing energy and transmitting it and whether it is best to do it in the sea, agriculture or somewhere else. Then, of course, we have this debate about whether we should have pylons or hydrogen. Nobody has yet invented a sky-hook, which would sort out all the problems.
I congratulate my noble friend Lord Nagaraju on a really interesting maiden speech. He did not have very long for it, but I can see that in future he is going to give us some really useful tips and thoughts about how we can improve what we do on these issues, including on access to rural communities. I hope he will take it upon himself to challenge the Government, the Opposition and everyone with whom he may have an issue, because the more experience we get here, the better it will be for everyone.
We have had many debates on rural communities and the need for special fuels to fuel people’s boilers, so I will not repeat them. I really welcome the boiler upgrade scheme of £9,000 for off-grid households that the Government recently announced, but it is worth noting that there are still uncovered costs of some significance in installing heat pumps. It is not a question of just having them delivered off the back of a lorry and plugging them in. They work well, but they take a lot of time and are quite expensive. In the past we have debated some communities, especially people in Cornwall, where I live, who have got together and saved quite a lot of money and made efficiencies by working with one supplier to create the right amount of power at a reasonable cost.
I have a question or two for my noble friend, because there are some issues that may need a little more thought. There is the cost of electricity, which we can go on debating, but putting in a heat pump can mean a problem with building regulations, and it is not always possible. If something goes wrong and you have to revert to what you had before, which is probably an oil burner, and you suddenly find that the building regulations do not allow you to replace it, what are you going to do?
I am quite sure it will work most of the time, but can my noble friend the Minister tell the House—now or, if necessary, in writing—whether, if an off-grid consumer finds that heat pumps are inadequate or unaffordable, with very high running costs, there are any measures in place to give them a bit more protection? In other words, what can the rural communities who rely on oil do to help themselves?
One of the big debates we have had in the last few months concerns the balance in demand between the new fuels to be used in the air sector and the fuels to be used in our heat pumps. When my noble friend the Minister comes to respond, I hope he will confirm that government policy does not give either of those two options strong priority over the other, or suggest that it is more important for people to fly than to stay warm. That would be a very dangerous attitude to take and I do not think my noble friend is taking it, but it would offer some comfort if, when the subsidy comes, we look to do our bit for the rural communities as well as trying to fly.
Earl Russell (LD)
My Lords, I congratulate the noble Lord, Lord Nagaraju, on a fine maiden speech, and I recognise his work in the field of AI. I also thank the noble Baroness, Lady McIntosh of Pickering, for bringing this debate, and I thank her and others for their contributions.
I have listened to the concerns—there are real concerns; we are going through a real energy transition. However, there is a danger of framing clean power as somehow inherently anti-rural or of treating net zero as a threat to our countryside. The evidence and public opinion do not support either of those two stances. The DESNZ public attitudes tracker shows that 68% of people support government actions to reduce the impacts of climate change, and over 60% support our 2050 net-zero goals. The clean power action plan is the backbone of our energy transition to get 95% of our power from clean sources from 2030, and it involves major investment in flexibility and necessary grid infrastructure.
I recognise the concerns. We have heard concerns about the loss of agricultural land from the noble Lord, Lord Fuller, although I did not recognise the figures given. Concerns about food security were raised by the noble Baroness, Lady McIntosh, and about visual amenity by the noble Lord, Lord Howell. We also heard worries about possible large-scale battery fires from the noble Baroness, Lady McIntosh, and fears that infrastructure is being imposed on communities. These are legitimate concerns, and those on this side who support renewable energy need to answer them, but I want to make the other case for renewables as well. The fact that I support renewables does not mean I do not recognise that they will have impacts. It is important that we discuss what those impacts are and how we can best limit them as far as possible.
Electricity demand is expected to more than double by 2050, so major investment is not an option—it is essential. It would have been easier if we had started earlier, but this must be done with our communities and not to them, and with proper regard to the visual amenity of our landscape, proximity to people’s homes and communities, and compensation where it is necessary. We should look at the figures. At the moment, only 0.3% of the UK’s land is used for large-scale solar, and the Government’s land use framework indicates that just 1% of England’s land will be needed for renewables by 2050. This is still less than the land taken and used by golf courses, yet I have not heard them mentioned today as a threat to our future.
I support floating offshore solar. It would be good to hear something from the Minister about that. There is a lot of misinformation in this space; there was a newspaper article last week comparing solar to Chernobyl. The implication is that every solar project is a blight on the countryside, but that is simply not true. Solar can have low visual impacts, increase biodiversity gains and bring meaningful community benefit. Agrivoltaics can help farmers to transition to help to improve crop yields in the face of rising temperatures.
The real threat to our countryside is not from clean power but from the cost of inaction. It is from the rise of fossil fuel markets, escalating bills and the growing damage caused by climate change itself. Our rural communities are more susceptible because they have less well-insulated homes, they need to drive more and they are subject to the impacts of climate change, whether from declining harvests, rising temperatures or increased flooding. The UK has warmed already by 1.2 degrees Celsius since 1884. We have had the five worst harvests since 2000. Inaction on climate change threatens our food security far more than any solar panel ever could.
I want to look at the opportunities to get this right and at what more can be done. We need to use rooftop solar first. I ask the Government what more they are doing to make use of warehouses, car parks and public buildings. Planning is also crucial, so I ask the Minister about the strategic spatial energy strategy. My understanding is that it is coming by autumn 2027. I push the Minister as well on community energy, which has also been mentioned, because people in the countryside should be able to benefit from the energy that they host. I ask the Minister about the community right to generate and what more is going to happen to push onshore wind.
However, the idea that the renewables transition is inherently anti our rural communities and our way of life is simply not true.
Low-carbon Heat Networks
Earl Russell Excerpts(1 week ago)
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Lord Whitehead (Lab)
My noble friend is absolutely right about the importance, cheapness and flexibility of heat networks for the future. Indeed, the Government are taking that flexibility—that essential nature—of heat networks very seriously in their ambitions for them to provide something like 20% of total heat by 2050. Among other things, the Government are doing that through the green heat network fund, to bring forward investment, and to make sure, through the heat network efficiency scheme, that existing heat networks are brought up to scratch with the newer ones that are coming on stream.
Earl Russell (LD)
My Lords, we welcome the Statement made yesterday by the Energy Secretary that the Government will be working to accelerate the £15 billion warm homes plan. We support the work that the Government are doing on heat networks but, in light of the current energy crisis, what further work will be done to accelerate the rollout of heat networks, particularly for social housing, to ensure that those in fuel poverty get the help that they need as urgently as possible?
Lord Whitehead (Lab)
The noble Earl is quite right to emphasise how important it is to accelerate the rollout of heat networks, particularly in view of the present gas volatility crisis. As has already been mentioned, heat networks can source their heat from anywhere. For many years Southampton heat network, if I dare mention it, has sourced its heat from geothermal energy. There are many other heat networks that can source heat from waste heat, mine heat and, as has also been mentioned, the future heat from data centres. So the customer greatly benefits from having access to heat that otherwise would not be accessible so far as a home is concerned. That is why we are determined to push forward with heat networks as fast as we can, and to make sure that the target—that is, 20% of heat from networks as a portion of heat overall—is achieved in very good time.
Electricity: Domestic Pricing
Earl Russell Excerpts(1 week, 1 day ago)
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Lord Whitehead (Lab)
My noble friend is absolutely right. Although gas accounts for only 30% or so of the market, at the moment it sets the price over 60% of the time with marginal cost pricing arrangements. It is right that we need to go faster and further. Indeed, today the Government have announced plans, among many other things, to ensure that the element of the renewable input into the system—on renewables obligations rather than fixed-price contracts for difference—can be moved over to that latter category as soon as possible, thereby bearing down on the amount of time that gas sets the price in the market.
Earl Russell (LD)
My Lords, we cannot afford continued fossil fuel dependency. We welcome the move from legacy contracts to cheaper ones. Indeed, my party proposed similar over a year ago. I support the Greenpeace Power Shift RAB model to remove gas, the most expensive component, from the market. Are Ministers still looking at these proposals, and will they take them forward? If not, why not? Together these proposals fall short, and that is my worry here. Despite the way they have been trailed, they will not deliver the savings we require.
Data Centres: Energy Demand
Earl Russell Excerpts(1 week, 6 days ago)
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Earl Russell
To ask His Majesty’s Government what steps they are taking to ensure that projected increases in energy demand from data centres do not compromise the achievement of their targets for clean power by 2030 and for net zero by 2050.
The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)
My Lords, the Government recognise that Great British electricity demand is expected to grow significantly, driven in part by advances in AI. We are clear that this growth must not prevent delivery of clean power by 2030 and net zero by 2050. The Government are working to ensure data centre energy demand supports a flexible, resilient and increasingly low-carbon electricity system, including through smarter siting, improved use of existing clean generation and more efficient use of power. Importantly, evidence has shown that AI will support emissions reduction across the economy through improved efficiency and system optimisation, potentially outweighing additional electricity demand.
Earl Russell (LD)
My Lords, with Ofgem warning that proposed data centres are seeking 50 gigawatts, exceeding our current peak demand, my view is that, as yet, inadequate assessments have been made by government and regulators of AI’s climate impacts. Does the Minister agree that it is unacceptable merely to believe that this demand is compatible with clean power and our net-zero targets? I ask the Minister to commit to a NESO standing forecast for AI’s electricity use and to ongoing direct contact between government and the Climate Change Committee on data centres.
Lord Whitehead (Lab)
I completely agree with the noble Earl that merely believing that it is all going to be okay and that we can easily absorb all these additional demands on the energy sector without doing anything else is, at least, a folly. That is why the Government are taking substantial steps, for example through the AI growth zones, to make sure that we plan where data centres will be and make sure that those data centres are as closely aligned as possible with sources of either optimised electricity or constrained electricity or with new sources of energy production, so that the AI data centre development is not a burden on the system but an addition to it.
Energy Prices Act 2022 (Extension of Time Limit) Regulations 2026
Earl Russell Excerpts(2 weeks, 2 days ago)
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Lord Ashcombe (Con)
My Lords, the Energy Prices Act 2022 was brought forward in circumstances that were, by any measure, extraordinary. It was a moment of acute global volatility, when Governments across Europe were forced to act at speed to shield households and businesses from unprecedented shocks. Those conditions justified exceptional paths but, as we move further away from that crisis moment, it is right to ask whether repeated extensions of emergency measures remain the most appropriate long-term course.
Energy security today is defined not only by the balance of supply and demand over the year but by the system’s resilience at moments of stress. The Government’s own modelling makes clear that peak day gas demand remains high, even as overall annual consumption gradually declines. It is those peaks, on the coldest days, typically when the wind does not blow and the sun does not shine, and the tightest margins that test the system most severely.
In 2024, gas provided 36% of the UK’s energy needs. It is used not only in generating electricity but, importantly, in domestic and industrial heating. Domestic gas production remains a critical component of the UK energy system. In 2024, the UK continental shelf provided 43% of the UK supply, imports of liquid natural gas provided 14% and the balance was imported from Norway. It is more reliable than imported alternatives, which can always be diverted elsewhere—even the Norwegian imports—as Europe becomes ever hungrier for the same molecules. Domestic gas goes into the extensive UK network at significantly lower carbon-emissions intensity—some three times lower—than liquid natural gas, which predominantly comes from the United States, and it is far less exposed to geopolitical risk or global bidding cycles. LNG will remain an important source of flexibility, but it cannot substitute for domestic supply, particularly given the UK’s very limited gas storage capacity.
Maintaining a stable level of domestic production also sustains the essential infrastructure on which the whole system depends: the pipelines, terminals and onshore hubs that provide flexibility, resilience, affordability and, critically at this current time, jobs. Once the infrastructure and experience are lost, they will not easily be rebuilt.
More broadly, there is a strong case for moving from crisis area interventions towards stable, rule-based arrangements. Such an approach would continue to protect consumers when prices spike, while giving investors the confidence needed to support the system in more normal times. That balance between consumer protection and long-term stability is essential if we are to secure an orderly transition and a resilient energy system for the years ahead.
With these points in mind, I would like to pose four questions to the Minister. First, can he outline a clear pathway from the continued use of emergency powers under the Energy Prices Act towards a permanent, price-responsive framework that supports investment and resilience? Secondly, how do the Government intend to ensure that critical gas infrastructure remains viable if domestic production continues to decline? Thirdly, what assessment has been made of the risks associated with greater reliance on LNG imports, particularly in light of the UK’s limited gas storage and exposure to global market volatility? Finally, have the Government considered the carbon implications of increased LNG reliance, given its significantly higher life-cycle emissions compared with UK gas produced here?
Earl Russell (LD)
My Lords, I will respond to the Energy Prices Act 2022 (Extension of Time Limit) Regulations 2026 and the related Utilities Act 2000 (Amendment of Section 105) Order 2026, which has already come into force as a companion SI. I thank the Minister for his introduction.
These instruments are technical and minor, but important. They enable the Government to continue to deliver support through the RO to Exchequer scheme, under which 75% of the domestic cost of the renewables obligation is funded by the Exchequer, rather than passed through to household bills. This matters because households remain under intense pressure from high energy costs at a time of renewed global energy insecurity. The renewables obligation is a legacy scheme that was closed to new generators in 2017 but will continue for existing participants until 2037. The Government’s decision, announced in the November 2025 Budget, to shift 75% of the domestic cost to the Exchequer was therefore welcome. This continuation is expected to reduce average household bills by over £100 a year. This alone will not resolve the wider cost of living challenge, but it is a sensible and pragmatic intervention.
The purpose of this statutory instrument is relatively straightforward. It extends by six months, from 25 April to 25 October 2026, the time limit under the Energy Prices Act 2022, allowing the Government to keep using these powers while legislative changes are prepared. In the absence of primary legislation, this is the only way to avoid a gap in this financial support. We therefore support the Government’s intention to maintain assistance under the scheme.
Support to reduce consumer energy bills is needed now more than ever. However, the possible need for repeated short-term extension does raise some broader concerns about timetabling and certainty. Households should not risk losing support simply because the powers needed to deliver it are temporary and expire before replacement legislation is ready. I understand that the Government expect that further instruments will be needed—the Minister confirmed this in his speech—to extend this period again. Without primary legislation in place by October, another SI will need to be brought forward. I understand that the department is working on permanent legislation, which we welcome, but this SI is in effect a short-term bridge, not a long-term permission to proceed indefinitely. It buys the Government time either to legislate or, failing that, to bring forward a further SI.
I will therefore ask the Minister a couple of questions. First, when does he intend to bring forward the proposed primary legislation? What legislative vehicle might be used: will it be the energy independence Bill? How will the department ensure that there are no gaps when temporary powers are replaced?
Fuel Supplies: War in Iran
Earl Russell Excerpts(1 month ago)
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Lord Whitehead (Lab)
The noble Lord will not be surprised to hear that I do not agree with his analysis of why the two refineries that have closed in the UK have done so, but the four refineries that we have in the UK are all producing well and in a robust condition. The Government will continue to monitor that process, but there is no reason to believe that further refineries are likely to close in the near future.
Earl Russell (LD)
My Lords, does the Minister agree that while the conflict with Iran has driven up oil and gas prices, this is not currently a fuel supply crisis, and motorists and households should therefore continue to purchase fuel and gas as usual? If the conflict persists and international supplies are further disrupted, what steps are being considered to safeguard aviation fuel supply and to prevent significant increases in aviation fuel prices in the longer term as we head towards the summer?
Lord Whitehead (Lab)
The noble Earl is right; this is currently, in essence, a price crisis and not a supply crisis. That will remain the case for quite a long time, depending on how long the war continues. If the war continues for a very long time, there obviously will be issues not necessarily of supply to the UK but offset issues relating to other people trying to eat the UK’s lunch, as it were, in their quest for supplies elsewhere in the world. The Government have already taken action in terms of taking part in the IEA’s release of substantial amounts of oil to make sure that that does not happen in the medium term and co-ordinating with efforts internationally to make sure that jet fuel, for example, is available on a world basis. Aircraft and other companies in that field hedge their supplies very long in advance, and therefore this is not an issue for the immediate future.
Contracts for Difference (Sustainable Industry Rewards and Contract Budget Notice Amendments) Regulations 2026
Earl Russell Excerpts(1 month ago)
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The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)
My Lords, after all that, noble Lords have me all over again for this next one. We had a very interesting and absorbing debate on the last SI, with some very good points made, but I hope that this debate can move to a conclusion with reasonable alacrity. I will make a brief opening statement. These regulations were laid before the other place on 5 February 2026. I remind noble Lords that they still carry the legacy name of the policy, but it is now known as the clean industry bonus.
I will cover three points: first, the purpose and direction of the clean industry bonus in the next rounds of bidding for offshore and onshore wind, AR7, AR8 and AR9; secondly, how the regulations will support the continued evolution of the contracts for difference scheme; and, thirdly, why the clean industry bonus funding for offshore wind will now be conditional on applicants signing up to an offshore wind fair work charter and how we are using the policy to help drive a more strategic approach to skills.
I turn first to the scheme. Contracts for difference remain the Government’s principal mechanism for supporting new low-carbon electricity generation. The CfD has a strong track record in deploying renewables at pace while protecting consumers through competitive allocation. But as the offshore wind sector has matured, it has become increasingly clear that delivering clean power at the lowest cost is not on its own enough. We must also secure the industrial capability and resilient supply chains needed to build and maintain that infrastructure here in the UK.
That is the purpose of the clean industry bonus. It will provide additional CfD revenue support for offshore wind developers that commit to investing in UK supply chains, such as factories and ports, or those that invest in cleaner supply chains overall. Funding is allocated through a competitive process run ahead of the main CfD allocation round, with awards made on the basis of value for money and payments released only when commitments are delivered. The record of this is that, in allocation round 7, £204 million was allocated through the clean industry bonus, crowding in up to £3.4 billion of private investment into offshore wind factories, ports and supply chains across the UK. The scale of investment represents a significant vote of confidence in the UK’s supply chain and a strong return on public funding.
I now turn to the evolution of the scheme. These regulations will make targeted, practical improvements to allocation round 8—the next one coming up—simplifying the process for applicants, clarifying rules on budgets and ensuring that the scheme operates smoothly. In particular, the changes will speed up and streamline elements of the application process, reduce administrative burdens, provide a clearer legislative basis for how budgets can be set and communicated, and clarify the position where delivery is disrupted by events outside an applicant’s reasonable control. In addition, the regulations will update the scheme’s sunset arrangements so that the clean industry bonus may be applied only to a round established before 31 December 2028, unless Parliament wishes to prolong it. It is for AR7, AR8 and AR9. The Government also intend to extend the clean industry bonus to onshore wind from allocation round 9, providing a sensible lead-in period for that smaller industry to prepare.
My third and final point is on fair work and skills. The most significant change for allocation round 8 is that clean industry bonus applicants will need to sign up to the offshore wind fair work charter, a tripartite agreement between unions, business and government that aims to raise the standard of job quality in offshore wind and make jobs in the sector more attractive. The charter builds on forthcoming commitments in the Employment Rights Act 2025, in particular by asking that the offshore wind sector proactively implements voluntary access agreements for trade unions. It also includes a commitment to strive for best-practice health and safety standards that go beyond legal minima.
Our commitment to good jobs through the clean industry bonus does not stop at the fair work charter. We are pressing ahead with a skills investment fund that will help develop the skills needed for the clean energy transition. The idea is that offshore wind developers will pool together skills funding and initiatives rather than relying on individual projects trying to address short-term needs. The Government and the offshore wind industry have agreed that they will work together to set it up by 2027 and that it will be funded by existing developer contributions to the supply chain, not by asking for more money. Once that skills investment fund is up and running in 2027, developers will be asked to contribute to it as a condition of taking part in the CIB.
In conclusion, these regulations build on the foundations laid in allocation round 7. The success of that foundation is in front of us. They strengthen and supply the operation of the scheme and introduce provisions of fair work and skills. I beg to move.
Earl Russell (LD)
My Lords, I note at the outset that on these Benches we welcome the direction of travel as set out in this SI. These regulations aim to modernise the contracts for difference scheme and strengthen the clean industry bonus, previously the sustainable industry rewards, ensuring that our transition to net zero is not only greener but fairer and more locally grounded. We note the figures the Minister gave in his speech about just how much funding this SI can help levy into our green industry and our local green economies.
The Liberal Democrats have long championed the principle of clean industry growth that benefits and serves our communities, so we see the extension of the clean industry bonus framework to all CfD allocation rounds before December 2028 as a welcome and sensible move. Likewise, providing greater flexibility in budgets through new minima and maxima can, if well managed, encourage dynamism and adaptability in fast-changing energy markets. But that flexibility must be balanced, and we must make sure that obscurity does not creep in with that.
The move to express CfD budgets in total sums rather than pounds per gigawatt raises a question for us. How will Parliament and the public track whether these funds are allocated efficiently or indeed equitably between technologies and different technologies in different regions? If the Secretary of State can now set sub-budgets for different technologies, will there be transparent reporting mechanisms showing how these powerfully restrictive levers are used and on what evidence they are used?
The Government’s stated aim is to reward clean energy responsibility and community-based industry practices, and we support that wholeheartedly. Yet these regulations also compress the consultation window for future framework revisions from the original 30 days, I think it was, down to just 10. Are officials satisfied that the timescale is adequate, that it will not push out smaller-scale contractors and that they will genuinely be able to compete on a fair and level playing field?
The introduction of fair work standards for developers seeking the clean industry bonus is also welcome. If the green economy is to deliver social renewal alongside decarbonisation, it must be built on fair pay and secure conditions, with workers having a voice in their workplace. Requiring developers to adhere to the fair work charter negotiated with trade unions is overdue but is a very important and welcome reform. Can the Minister give me a sentence or two about how, when these measures come in, the Government plan to monitor and verify that they are being met? What reporting and monitoring mechanisms will exist, and how can the public have confidence in that?
Turning to the force majeure provision, I recognise why the Government have that clause in the contract, but it raises a question. Who makes judgments on that, and what are the objective criteria for making those judgments? Obviously, the Government want clear safeguards, as do we. We want to make sure this clause does not become a loophole through which binding supply chain commitments can quietly evaporate because of unforeseen circumstances.
The extension of the scheme’s life plan to the end of 2028 feels pragmatic, but it is also modest given that 2028 is not that far away. What are the Government doing to look beyond that 2028 framework, which is only three years away? Also, are they considering putting the clean industry bonus on a statutory footing and extending that timeline?
We welcome these commitments. Although we have a couple of questions, we very much welcome the direction of travel set out in this SI.
Warm Home Discount (England and Wales) Regulations 2026
Earl Russell Excerpts(1 month ago)
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Earl Russell (LD)
My Lords, I rise to respond to the Warm Home Discount (England and Wales) Regulations 2026. As we all know, we are at the start of another fossil fuel price crisis, at a time when individuals and the state can least afford it, so bringing down energy bills and speeding up the deployment of renewables must be an absolute national priority. The renewed crisis in the Middle East has once again exposed families and small businesses to the full volatility of the fossil fuel price market. We support the extension of this scheme, but the questions that we want to ask are around its efficiency and its design for the decades ahead. As I said, we welcome the extension of the scheme to 2031 and the improvement in transparency and data sharing that this instrument introduces.
Community matters, as does recognising that fuel poverty remains a persistent, not a temporary, problem. While I appreciate that this scheme was designed and extended before the present crisis, it will need to operate in its aftermath and the continuing process. The regulations fix the core rebate at £150 for the next five years. We all know how dramatically prices can move even in a single winter, let alone over half a decade. Energy markets are in flux at the moment, and these regulations will need to work over a long period of time. What concrete mechanisms will the Government use to review the adequacy of this £150 rebate during the life of the scheme? Are there any circumstances in which Ministers would consider increasing it—for example, if the fuel crisis continues? Without an automatic or at least a clearly defined review process, are we not effectively asking households in fuel poverty to gamble with their warmth in the face of a possible real rise in prices?
Similarly, we welcome the fact that the aggregate non-core spending obligation will rise under this scheme, but it will rise only modestly, from £78 million in 2026 to £84 million by 2030. Taking into account inflation over those years and the levels of fuel poverty at the moment, if the present fuel crisis continues, is there any intention or ability to revisit that non-core spending figure mid-scheme if economic conditions or energy prices continue to accelerate? Do the Government plan to publish an annual assessment of whether the level of support is still adequate in real terms, rather than waiting until 2031, particularly in light of this real change in circumstances?
Both previous noble Lords spoke about energy debt. Many households across the country are carrying unprecedented levels of energy arrears on their accounts. That continuing level of family debt is a real point of contention and a struggle for households. Against that, the industry-wide cap is to write off debts at a mere £6 million, with a £2,000 limit for individual households. That is absolutely welcome, but many families are already beyond those levels. Can more be done, and will there be a review within this programme? How did the Government arrive at £6 million? What assessment was made of the total scale of energy debt and have Ministers considered whether that cap should be more flexible, in case this crisis worsens?
If the Minister will excuse me, I want to go slightly off-piste. I do not like to do that too often, but I really welcome some of the moves in this SI around data and data sharing. A lot more work needs to be done there so that we can target support efficiently and fairly to those who need it most. I have been looking at some of the work that Stonehaven has done. It has been raising arguments about moving from crude, one-size-fits-all interventions to a more nuanced understanding of household vulnerability, looking at income, health, energy use and property characteristics together and setting up a safeguard score for each household, using better data so that help can be better provided. That would mean we could target bill credits, tailored repayment plans and more generous debt relief to those in most severe need.
I have a couple of questions for the Minister that perhaps go a bit beyond this SI. I really encourage the Government to do more work in this area. As they plan for a continuing fuel crisis, improving data sharing between government departments, moving beyond the DWP alone to include HMRC, health agencies and others, would be a really important exercise, particularly for the future.
I note that the Minister said that he is expecting 98% of these payments to be made automatically, but in volume that 2% is still a large number of households that are falling outside the system and bill support. I would like to see the Government doing more on data sharing, particularly multi-agency.
Far too often, people in fuel poverty are also in different kinds of poverty. There really should be a share-once support register, so I would also like the Government to do more on greater working between different utility providers so that, once someone is on a priority register, information can be shared across utilities and people do not have to give the same information over and over again. That is really important and it is something that we should include in Ofgem’s work with suppliers, but it is still a missing piece. Local authorities and charities often know much more about their local residents and households in poverty, so there is much more to do to make this data available and to include local authorities and charities in this process.
I will be brief but, above and beyond this, I think there is a need for more structural reform around these issues. Others have spoken on this, but we need to decouple electricity prices from gas so that consumers feel the full benefits of cheaper, clean power. I really want the Government to look again at the possibility of taking forward a social tariff if the energy crisis continues. We need to do more to support households struggling with energy and fuel poverty.
We welcome this SI. It is good to see these measures extended, as they are really important, but there is so much going on in this space. We welcome this SI as the start of a conversation, not the end of it.
Lord Moynihan (Con)
My Lords, I thank the noble Earl, Lord Russell, for raising the important issue of data. As I see it—but I am happy to be corrected by the Minister—this SI focuses on matching customers, and the data analysis is exceptionally important. It brings our approach to data up to date, because it enables the Secretary of State to direct suppliers to communicate with matched customers identified through automated data matching, and requires suppliers to provide information on eligibility, the use of automated decision-making and where to find the scheme’s privacy notice.
It goes further—again, I welcome this—in replacing annual fixed spending targets with annual estimates reflecting the number of eligible households on qualifying means-tested benefits. As I see it, and this is important and welcome, the SI addresses the need to recognise that data interpretation is not always 100% accurate. The noble Earl, Lord Russell, mentioned the 2%. I hope that was the reason why, under this SI, late rebate notices can be issued after the scheme year in cases where the Secretary of State is satisfied that a customer did not receive the rebate because of an administrative error by a supplier or, indeed, the Government. Data matching is such an important issue and, as it has been raised in the Committee, it would be helpful if the Minister could give us a little more colour on it.
The second point that has come up in conversation today is the question of affordability and whether the £150 warm home discount is sufficient. I was very grateful for my noble friend Lady McIntosh’s comments on that, which I will come to. Maybe the best way to encourage the Minister to respond is to quote from a couple of third-party commentaries that cover this issue. First, the director of policy and influencing at Independent Age, Morgan Vine, stated:
“We welcome the extension of the Warm Home Discount to 2030/31. The older people on low incomes we speak to tell us it is a vital lifeline that goes some way towards keeping their heating on during the coldest months. However, at just £150, the current value of the Warm Home Discount no longer goes far enough, as energy prices remain stubbornly high. We are urging the UK Government to increase the payment to £400 so it better reflects the real cost of heating a home. This increase needs to be delivered via government funding to avoid the cost being put on energy bills”.
I would be grateful if, in his response, the Minister could comment on this statement from Morgan Vine.
UK Energy Sources and Cost of Energy
Earl Russell Excerpts(1 month, 1 week ago)
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Lord Whitehead (Lab)
The noble Earl will be aware that the present crisis is essentially a price crisis rather than a supply crisis. I emphasise again that the UK has a strong and diverse range of energy supplies and that the physical supply of fuel to the UK is stable. However, the Government have not been idle in this respect. Among other things, the Government have introduced transitional energy certificates for North Sea and associated producing fields that allow producers to engage in tie-backs, which is the development of fields additional to fields that are already in production. That is completely in line with IEA recommendations on how production can be increased in the not too distant future.
Earl Russell (LD)
My Lords, I welcome the measures that the Government have already taken, particularly around reducing the cost of heating oil. Does the Minister agree that it is important that we work with allies and partners to encourage all involved to stop targeting energy infrastructure?
Lord Whitehead (Lab)
The noble Earl is absolutely right that one of the key issues in the recent escalation has been the targeting by both sides of oil and gas installations. Clearly, this brings into a further spotlight the need to seek an urgent de-escalation of hostilities and the resolution of this crisis by negotiation rather than continued bombing of everyone’s oil and gas facilities.