Energy Security Strategy

Greg Hands Excerpts

Tuesday 5th July 2022 Westminster Hall

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

Thank you, Mr Davies. I congratulate the hon. Member for Birkenhead (Mick Whitley) on securing this important debate. I do not have much time to respond, but to start I would like to briefly recap the context in which the British energy security strategy—the BESS, as I might call it—came about.

For years, of course, the UK has been dramatically reducing our dependence on fossil fuels and building up home-grown, low-carbon energy. Just 10 years ago, nearly half of our electricity came from coal—the most polluting fossil fuel. Now, that is down to under 2%. Our hugely successful offshore wind sector is the largest in Europe and second only to China in the world in terms of deployed volume. All those policies are the result of decisions made by this Government over the past 12 years. Russia’s illegal war in Ukraine has given this work new impetus, as Putin’s weaponisation of the global energy supply makes clear. Energy security is a matter of not only decarbonisation—as vital as that is—but national security. The UK is not dependent on Russian hydrocarbons, but the war’s impact on the global market has been severe and affects us all.

Turning to the debate, the BESS sets out the steps we will take to generate more clean energy in the UK for the UK in the longer term to protect our national security, reduce our emissions, create new jobs for our people, revitalise industrial heartlands and drive down bills for consumers.

I will deal with a few points raised by the hon. Member for Birkenhead. He said the Government refuse to support new onshore wind. That is not the case. We will be consulting on developing partnerships with supportive communities that wish to host new onshore wind infrastructure in return for benefits, which could include lower energy bills. He talked about tidal energy, which cropped up in a few Members’ contributions. Actually, this Government were the first to commit a dedicated pot—in contract for difference allocation round 4, which is taking place right now—of £20 million for tidal energy projects. If people have a specific tidal energy project they wish to show us, will they please get in contact with my Department? I have been shown a number of tidal energy projects in recent times in areas near the constituency of the hon. Member for Birkenhead, such as Colwyn bay and Deeside.

The hon. Member talked about our so-called reliance on Russian oil and gas. No, less than 4% of our gas last year was imported from Russia. That will be down massively this year. We are phasing out Russian oil, which will not be more than about 10% of our oil by the end of the year. Russian coal will also be prevented by the end of the year. There is no dependence on Russian hydrocarbons in this country in the same way there is in many of our European neighbours. The hon. Member also attacked the new round of licences, but he will know that the new round later this year will take into account the climate compatibility checkpoint, which we have been consulting on, and we will release the results of that consultation in due course.

Remarkably, the hon. Member then said there will be no forgiveness for this Government because of our record on renewables and energy efficiency. I found that extraordinary. On energy efficiency, we have gone from 14% of properties in bands A to C being energy-efficient in 2010 to 46%. That still means there is work to be done; 54% do not yet meet the standards we would like them to. The hon. Member says there will be no forgiveness for this Government, but I do not know what he thinks the last Government will be given for their performance. Our figure is 46%, but we lifted it from 14% when we took power. Similarly, on renewables, 43% of our electricity is now generated through renewables. That is a very good figure, but it was 7% when we took power. If there is no forgiveness for a Government that achieve 43% through renewables, what hope is there for a Government that only produced 7%?

My hon. Friend the Member for Wantage (David Johnston) made an excellent speech on, again, the importance of energy efficiency. We are spending £6.6 billion in this Parliament to ensure we get more energy-efficient homes, and £450 million has been committed to the boiler upgrade scheme. My hon. Friend has been a consistent and dedicated promoter of the Local Electricity Bill. He is right that there is good consensus on this. The Government support local electricity generation. I have also met the campaign groups. There are funds available, such as the levelling-up fund, which is used quite frequently. There is the example of a local community energy scheme in Glastonbury, which has benefited from that levelling-up fund. I have reintroduced the community energy contact group to ensure we are talking to the sector. The group had its first meeting on 10 June.

The hon. Member for Bath (Wera Hobhouse) made the good point that there is plenty of wind in the UK, as we benefit from all the waters around us. We have 15 times the waters that Germany does, and UK waters are two and a half times the land mass of Germany. None the less, my right hon. Friend the Member for Wokingham (John Redwood) made a good point about the intermittency of wind. Of course, we can get greater diversity if we have more seas involved, but that will not entirely obscure the issue of intermittency. That is why he is right that we need nuclear as well. I am forever hopeful that the Liberal Democrats will change their ideological anti-nuclear stance, which they have had at least since they were in coalition with us. In coalition, they were warming to the idea of nuclear power. Unfortunately, that has been lost.

My hon. Friend the Member for Weston-super-Mare (John Penrose) made an excellent speech with some probing points. REMA is referenced in the British energy security strategy, and work is moving at pace. How can we get from a low-capital cost, high-generation cost energy system that is not particularly intermittent to a high-capital cost, low-generation cost system with intermittency? He is right to raise the point about the implications for our energy system going way beyond generation targets.

On green levies, as we set out in the heat and buildings strategy and in the net zero strategy, we will launch a fairness and affordability call for evidence on options for energy levies and obligations to help to rebalance electricity and gas prices, and to support green choices, with a view to making a decision later this year.

The price cap will remain in place until at least the end of 2022 to protect millions of customers. My hon. Friend the Member for Weston-super-Mare will keep an eye out for the energy security Bill to see how we might take that further. As he will know, this year we are delivering a total of £37 billion in cost of living support to customers, including a £400 non-repayable grant

The speech from the hon. Member for Bootle (Peter Dowd) was well put together but fundamentally anti-free market. I can see why the right hon. Member for Islington North (Jeremy Corbyn) decided that he would be a suitable shadow Chief Secretary to the Treasury—to not make sure that control was kept over the public finances. I have already addressed the points about community energy.

My right hon. Friend the Member for Wokingham made a strong and probing speech, as he always does on energy matters. He is right that it is our patriotic duty to ensure not only that we get off Russian gas, but that our European friends and neighbours do as well. That is why National Grid tells me that this summer, the UK is playing a major role in filling European energy storage. About 15% is coming either from the UK or via the UK, using our liquified natural gas capabilities.

My right hon. Friend made a strong point about intermittency. Nuclear is the answer; it is the only proven way for reliable, non-intermittent electricity to be produced at scale. He is also right about hydrogen, but he is not quite right to say that we are not bringing forward more fields. Licensed fields that have been consented and have come on stream include Blyth, Elgood, Tolmount, South Hook, and Alwyn East—I can give him a longer list. Other fields are coming on stream.

The hon. Member for Strangford (Jim Shannon) made important points. I will have to write to him about the Strangford tidal scheme. He is definitely right to say that nuclear, and Northern Ireland, are part of it. Gordon Lyons and I meet regularly, including to discuss hydrogen.

The SNP spokesperson, the hon. Member for Midlothian (Owen Thompson), gave a familiar list of complaints. He said that he wants tidal schemes. As I mentioned, we have funded £20 million of dedicated support. He wants ringfenced and guaranteed money every year. Well, that is a typical SNP position. If there were a separate Scotland running a 9% budget deficit, which is what it would be doing, I do not think that ringfenced and guaranteed money would be available for anything—the hon. Gentleman perhaps needs to go back and have a look at the finances in the event of separation. Grid charges are a matter of Ofgem, but it is worth recognising that Scottish consumers benefit from lower charges, which is important. I cannot understand, in the light of Scotland’s incredible nuclear tradition, why the hon. Gentleman is so opposed to nuclear.

The hon. Member for Southampton, Test (Dr Whitehead) is right about constraints. That is why we are looking at hydrogen batteries and storage. He is quite right about biomass, and on blue and green hydrogen we are doing both. I had better leave some time for the hon. Member for Birkenhead to reply.

GB Warm Home Discount (Scotland) Scheme

Greg Hands Excerpts

Thursday 30th June 2022 Written Statements

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

My noble Friend the Parliamentary Under-Secretary of State for Business, Energy and Corporate Responsibility (Lord Callanan) has today made the following statement:

The Government have today laid draft affirmative regulations for a GB warm home discount scheme in Scotland to run from 2022-23 until 2025-26.

The scheme, with increased funding of around £13 million and totalling £49 million in 2022-2023, will provide energy bill rebates worth £150 to over 280,000 low income and vulnerable households during winter, when they need it most.

WHD provides direct energy bill support, in the form of a rebate on energy bills, for fuel poor, low income and vulnerable households. It is a key policy in the Government’s programme to tackle fuel poverty and reduce energy costs for low income households. Since its launch in April 2011, WHD has provided over £3.3 billion in direct support to households in Great Britain. Now more than ever, this rebate is needed to help low income and vulnerable households with their energy costs. The scheme complements the Government’s £37 billion worth of measures this year to support households with rising energy bills and the cost of living.

The WHD is set in legislation and requires energy suppliers above a certain size to participate. While the costs of the scheme are borne by energy suppliers and, ultimately, their customers, Government set the overall spending target. In the 2020 Energy White Paper, the Government committed to extending the warm home discount (WHD) to 2025-26 and increasing its value to £475 million (in 2020 prices) across Great Britain. Since then, we consulted on proposals for England and Wales, the details of which are set out in the Government response to consultation, published on 1 April and for which the regulations have been approved by both Houses. Similar proposals could not be replicated in Scotland, because the Valuation Office Agency (VOA) whose data we will use to identify homes which are high cost to heat, does not collect that data in Scotland. The Scottish Assessors (the Scottish equivalent of the Valuation Office Agency) do not collect the same data in Scotland.

Under the Scotland Act 2016, the Scottish Government have devolved powers to design and implement a WHD although the exercise of these powers requires the agreement of the Secretary of State, and some powers remain reserved, including determining the overall size of the obligation and the obligated parties. The Scottish Government requested that the UK Government make provision for a continuation of the WHD.

The WHD in Scotland will increase proportionately in line with the GB-wide increase to the scheme: from £350 million to £475 million in 2020 prices. Based on the apportionment methodology consulted on by the UK Government, the scheme in Scotland will be 9.4% or £44.65 million (in 2020 prices) of the overall scheme value. The proportion of funding going to Scotland will exceed its share of the GB population and its share of means-tested benefits recipients. The uplift means rebates are provided to an additional 50,000 families in Scotland each year on top of the 230,000 that already receive payments, and the rebate will also increase from £140 to £150.

We have also reduced the threshold for energy suppliers’ participation in the scheme, so more energy suppliers will participate. Suppliers with a small market share in Scotland who cannot meet their obligation through the provision of rebates to their customers will be able to provide other packages of help, including financial assistance, to other low income and vulnerable households.

Under the WHD in Scotland, around 90,000 low-income pensioners will continue to receive their rebates automatically through the core group element of the scheme. In addition, around 190,000 low income and vulnerable households, mainly working age, will receive the rebate by application to their energy supplier. Scottish households in or at risk of fuel poverty will also continue to benefit from support under industry initiatives funded under the WHD, which include benefit entitlement checks, energy debt and financial assistance, energy advice, and energy efficiency measures provided to low income and vulnerable households.

This expansion of the WHD scheme forms part of the wider support to help households with rising energy bills. In May, the Government announced over £15 billion of additional support, targeted particularly on those with the greatest need. This package builds on the £22 billion announced previously, with Government support for the cost of living now totalling over £37 billion this year. This includes: help to all domestic electricity customers in Great Britain to cope with the impact of higher energy bills, with £400 off their bills from October through the expansion of the energy bills support scheme (EBSS); a one-off cost of living payment of £650 to over 8 million households across the UK in receipt of means tested benefits; additional UK-wide support to help 6 million people who receive non-means tested disability benefits receiving a one-off disability cost of living payment of £150; over eight million pensioner households will receive an extra one-off £300 this year to help them cover the rising cost of energy this winter. For households that are not eligible for cost of living payments or for families that still need additional support; the Government are providing an extra £500 million of local support, via the household support fund. The fund will be extended from this October to March 2023, bringing total funding for the scheme to £1.5 billion. Millions of the most vulnerable households will receive at least £1,200 of one-off support in total this year to help with the cost of living.

Subject to Parliamentary processes, the UK Government will implement the scheme in Scotland as quickly as possible and support will be provided to Scottish households during the winter.

More information on the warm home discount scheme will be made available over the summer on gov.uk/the-warm-home-discount-scheme.

[HCWS164]

Draft Contracts for Difference (Allocation) and Electricity Market Reform (General) (Amendment) Regulations 2022

Greg Hands Excerpts

Tuesday 28th June 2022 General Committees

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

I beg to move,

That the Committee has considered the draft Contracts for Difference (Allocation) and Electricity Market Reform (General) (Amendment) Regulations 2022.

It is a pleasure to serve under your chairmanship, Mr Robertson.

The regulations were laid before the House on 11 May 2022. The draft instrument makes a number of amendments to the Contracts for Difference Regulations 2014 and the Electricity Market Reform Regulations 2014. Those amendments include changes to contracts for difference delivery and supply chain plan policy in preparation for the fifth allocation round. They will help support the ambition for the CfD allocation round, planned to open in March 2023, delivering on the ambitions set out in the “Net Zero Strategy” and the “British energy security strategy” to make progress towards the 2050 net zero target.

The CfD is the Government’s flagship renewable electricity support scheme. It is designed to offer long-term price stabilisation to new low-carbon generators, bringing investment forward at a lower cost of capital, and therefore at a lower cost to consumers. The scheme has been hugely successful in driving substantial deployment of renewables at scale in Great Britain while rapidly reducing costs to electricity consumers. CfD applicants with a capacity of 300 MW or more are currently required to present a supply chain statement to the Electricity Market Reform delivery body as part of their application. A statement is provided if a developer can demonstrate to the Secretary of State’s satisfaction that the project is likely to make a material contribution to the development of relevant supply chains. The aim of the policy is to increase productivity, competitiveness and capacity in our supply chains, promoting innovation and skills in the low-carbon electricity generating sector.

On 9 February 2022, the Government announced that CfD allocation rounds will run annually. The increased CfD round frequency underlines the Government’s commitment to achieving low-carbon electricity generation to achieve a fully decarbonised electricity system by 2035, subject to security of supply. The current policy approach to CfD delivery and supply chain plans needs to be strengthened in the context of annual allocation rounds. That will ensure the scheme continues to operate effectively, encourage low-carbon generation and provide confidence to investors and supply chain companies. It will support the delivery of those renewable technologies identified in the “Net Zero Strategy” and the “British energy security strategy” that are key to decarbonising the power sector, such as offshore wind, onshore wind and solar.

The regulations amend the current non-delivery disincentive—NDD—exclusion period so that an application cannot be made in respect of an excluded site in the subsequent two applicable allocation round. That will strengthen the current policy of excluding a site from only one subsequent allocation round. That is a consequential effect of moving to annual options. The change will ensure that the NDD exclusion period is aligned with the decision to hold allocation rounds on an annual basis from 2023, ensuring the NDD remains an adequate incentive to deliver projects.

The regulations also bring alignment with a change to the valuation formula introduced to the allocation framework for allocation round 4. For that round, the Government introduced changes to the valuation formula to reduce the complexity of the auction and to ensure that the earliest possible date of CfD payments is considered when calculating the impact on the budget. The regulations now introduce this technical change—amending the corresponding Contracts for Difference Allocation Regulations to reflect the amended formula.

Changes to supply chain plans include amending the validity period of a supply chain plan statement so that it is valid for nine months rather than the previous 12 months. That ensures that in practice developers continue to submit individual supply chain plans for each CfD allocation round in the light of the move to annual auctions.

We are also amending the requirement to provide a supply chain plan statement so that it applies to all floating offshore wind projects. That allows the Government to support the development of supply chains for the more nascent floating offshore wind industry as it approaches significant commercialisation and deployment. We seek to make those amendments now to give certainty to businesses that might be planning to take part in the next CfD scheme opening, as I said, in March 2023.

We are proposing the legislative amendments following a public consultation that ran from 4 February to 15 March, which gave stakeholders the opportunity to scrutinise and test the policy proposals. The consultation generated 41 responses from a range of developers of renewable generating stations, trade associations and bodies, suppliers and public and investment bodies. Officials also engaged wider audiences through an online event.

Overall, the policy proposals received wide support. The consultation led to one policy change to the supply chain policy proposals in response to the feedback received. A minor adjustment was made to the proposal to introduce floating offshore wind projects into the supply chain plan process whereby a bespoke, less burdensome process will be required to account for the smaller size of their projects.

The Government have set out a clear vision for how we will transform the production and use of energy, in a decisive shift away from expensive fossil fuels. The regulations, together with annual CfD allocation rounds, will help to support an increase in the pace of deployment of new renewable electricity generation needed to achieve our ambitions, while continuing to consider the likely cost to consumers and energy security. Subject to the will of Parliament, the arrangements will come into force on the day after the regulations are made.

Achieving our carbon budget and net zero targets will require deployment across a range of home-grown, green technologies at an unprecedented scale and pace that will support our transition from reliance on fossil fuels. Therefore, I commend the regulations to the Committee.

--- Later in debate ---

[Greg Hands]

I thank the hon. Members for Southampton, Test and for Kilmarnock and Loudoun for their good, detailed questions and contributions.

I welcome the broad support of the hon. Member for Southampton, Test. It is worth noting that arrangements for one CfD application can be rolled over, but that does not obligate a supply chain plan to be unamended. Most would probably evolve their supply chain over the period, which is valid for nine months and not 12, to reflect the move to annual auctions. That will ensure that applicants reflect changes in their commercial arrangements, and seek to innovate year on year, and not simply roll over supply chain plans. Industry acknowledged that and were supportive of the Government’s proposals.

The hon. Gentleman asked why floating offshore wind generation has been brought into the supply chain process. I think that is incredibly important. It is a relatively nascent industry, and ensuring that there is a good supply chain right from the beginning, and doing what the Government can do to steer it in that direction, is really important. Contrary to the hon. Gentleman’s suggestion that perhaps we should adopt a laissez-faire approach, I think there is a good reason for Government to be there right at the beginning to make sure that there is a strong supply chain for the UK to cement its place as a world leader in floating offshore wind, as we have been a world leader in fixed-bottom offshore wind, with Europe’s largest installed capacity.

[Dr Whitehead]

For the sake of clarity, I certainly do not wish to propose a laissez-faire regime for floating offshore wind generation. I am not arguing that there should not be a good regime, but how that regime is brought in as that nascent industry develops. I certainly think it should be subject to either a reduced threshold or it should conform with the 300 MW. I would entirely support that, because supporting the supply chains as the industry develops is clearly a positive and good idea—as the hon. Member for Kilmarnock and Loudoun said.

[Greg Hands]

I am glad that we are in alignment on the need for supply chain plans. It is key to note that in its first phases, floating offshore wind will typically consist of significantly smaller projects. Therefore setting a different limit at which the supply chain must be submitted makes perfect sense if we are to capture floating offshore wind projects and make sure that there is taxpayer value for money. That is in all of our interests, not just the Government’s. We must make sure that we able to develop and cement our advantage in the UK. We have a fantastic technological advantage when it comes to wind. To start with, we have a fantastic geographic advantage, and making sure that we can cement our world leader position will depend upon making sure that there are good supply chains for those projects, which are necessarily smaller than fixed-bottom offshore projects. That is the reason for the different threshold.

Floating offshore wind is a technology on the verge of significant commercialisation and deployment within the next five years. Being at a key juncture in terms of its deployment means that certain emerging technologies, like floating offshore wind, have the potential to play a really important role in helping us to meet net zero. Bringing those projects into the supply chain process will allow BEIS to support the development of the associated supply chain at the earliest stage, by encouraging the industry to invest in competitive supply chains and accelerate cost reduction.

The hon. Member for Southampton, Test asked about engagement with the Crown Estate. I engage with it all the time, probably on a weekly or almost a fortnightly basis. I am happy to consider his specific point about the Celtic sea. That sea will be very important for us. At the moment, offshore wind has been a huge success for this country, but it has been predominantly an east coast and Irish sea phenomenon. It is very strong in Scotland, the north-east of England, Yorkshire, Humberside, East Anglia, the Irish sea, and north Wales gets a piece of the action. But the developments in the Celtic sea enable us to bring extra places around the United Kingdom, most importantly south Wales and the west country of England, into the offshore wind industry. Our position as the world leader, and as Europe’s largest installed capacity for offshore wind, is one of this country’s really great success stories of the past 10 years. To bring the Celtic sea into that development will help to level up and make this an all-UK effort.

[Alan Brown]

I do not have a problem with the development of the Celtic sea, but obviously we cannot forget about the North sea. For the record, there has been a discussion about the Crown Estate of England and Wales allowing for the generation of 4 GW, and there is also Crown Estate Scotland and the ScotWind leasing round. That latter round had bids for 25 GW of offshore energy, but National Grid ESO is only allowing for 10 GW of that in its forward planning, so that is a real disconnect. Will the Minister allow for the full deployment of that 25 GW of ScotWind leasing?

[Greg Hands]

The hon. Gentleman is quite right; BEIS and the UK Government put a lot of effort and support into the ScotWind process. Of course offshore wind off Scotland is incredibly important to the country as a whole, and floating offshore wind will be a big part of that. On Crown Estate Scotland, the hon. Gentleman may be aware that I was involved in a lot of the legislation for the devolution of the Crown Estate to Scotland under the Scotland Act 2016. I am familiar with a lot of the issues in relation to Crown Estate Scotland. We have an excellent relationship with it. While recognising that Scotland has been a massive part of the delivery of our fixed-bottom offshore wind, and will be a massive part of the delivery of offshore floating wind, it is good to get all of the UK in on the action when it comes to offshore generation.

We are investing up to £160 million for new, large-scale floating offshore wind ports and manufacturing. That is a big investment of Government money to make sure that we have a great future when it comes to floating offshore wind. The funding, boosted by private sector investment, will develop port infrastructure capable of mass-producing floating offshore wind turbines and installing them out to sea, reducing the need to import from overseas. That will create thousands of new jobs in the UK’s industrial heartlands and around our coasts. We have recently announced £31 million of UK Government funding to be matched by industry for research and development in this sector.

The hon. Member for Southampton, Test asked about the light-touch regime. Again, I think it is a question of balance. For the smaller projects, and to start with it will be predominantly smaller projects, we want to look at their supply chains. That is really important to us, but, equally, we do not want to make a regime that is too onerous on those smaller projects. That is why there is a lighter touch regime and questionnaire, but a deeper down, if you like, in terms of the size of the companies that must make supply chain plans. The consultation on the new supply chain questionnaire closed on 14 June. The Government’s response detailing the new approach will be published in due course, and the updated questionnaire and guidance will be published this summer.

I think I have covered the removal of the 300 MW threshold from floating offshore wind. I think I have answered a few of the points raised by the hon. Member for Kilmarnock and Loudoun, and I think the anticipatory grid will be a key part of the debate. The criticism is that National Grid does not currently allow for anticipation of when projects will come on and provide for the grid. Ofgem is actively looking at that, and I expect that might be a key part of future debate. There will be a big scale-up in electricity generation, especially as our electricity demand will double by 2050. We need to have more grid, more network, more transmission network and more distribution network to make that happen. To make sure that our system is fit for that will be a key part of the energy security Bill to be considered in this parliamentary Session.

I hope that my responses have provided the necessary assurances so that Members can approve the SI. The changes in the regulations are essential to ensuring that the next CfD allocation round, which will start in March 2023—the first annual round—is a really important reform to drive through more renewable energy in this country. The regulations will help to make sure that our supply chains and other parts of the process are as best supported as possible, to make sure that we support the pace of renewable deployment while continuing to ensure value for money for consumers. That is why I urge the regulations to be made now, ahead of the next CfD allocation round in next March, so that developers have certainty as to who will be eligible to take part and on what basis. I therefore urge the Committee to agree to the regulations.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Contracts for Difference (Allocation ) and Electricity Market Reform (General) (Amendment) Regulations 2022.

Energy Supply Company Special Administration Regime

Greg Hands Excerpts

Tuesday 28th June 2022 Written Statements

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

Today I will lay before Parliament a departmental minute describing a number of contingent liabilities arising from the issuance of letters of credit for the energy administrators acting in the special administration regime for Bulb Energy Ltd (“Bulb”). These letters of credit replace previous ones provided, announced within past written ministerial statements, which soon expire.

It is normal practice when a Government Department proposes to undertake a contingent liability of £300,000 and above, for which there is no specific statutory authority, for the Department concerned to present Parliament with a minute giving particulars of the liability created and explaining the circumstances.

I have ensured that Parliament has been afforded the full 14-sitting day notification period to allow the proper scrutiny of these new contingent liabilities.

Bulb entered the energy supply company special administration regime on 24 November 2021. Energy administrators were appointed by court to achieve the statutory objective of continuing energy supplies at the lowest reasonable practicable cost until such time as it becomes unnecessary for the special administration to remain in force for that purpose.

My Department has agreed to provide a facility to the energy administrators, with letters of credit issued, with my approval, to guarantee such contract, code, licence, or other document obligations of the company consistent with the special administration’s statutory objective. I will update the House if any letters of credit are drawn against.

The legal basis for a letter of credit is section 165 of the Energy Act 2004, as applied and modified by section 96 of the Energy Act 2011.

HM Treasury has approved the arrangements in principle.

[HCWS145]

The Electricity and Gas (Energy Company Obligation) Order 2022

Greg Hands Excerpts

Wednesday 22nd June 2022 Written Statements

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

My noble Friend the Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Lord Callanan) has today made the following statement:

Upgrading our homes to be more energy efficient is the best long-term solution for reducing our energy costs, keeping ourselves warm and healthy in winter and tackling fuel poverty. It is also essential for our transition to net zero and in supporting local jobs and growth. This is why the Energy Company Obligation scheme remains a key policy in supporting low income and vulnerable households to upgrade their homes with energy efficiency and heating measures.

Making homes more energy efficient reduces heating costs permanently, mitigating the impacts of current and future price rises. There are wider benefits; energy efficient homes are more comfortable to live in, with consequent improvements to householder’s health and wellbeing.

The Energy Company Obligation has a good track record of delivering such upgrades to homes. Since 2013, it has installed around 3.5 million energy efficiency measures in 2.4 million homes across Great Britain.

In April, we published the response to the consultation on the future of the Energy Company Obligation across Great Britain, committing to an expansion of the scheme from £640 million to £1 billion a year and extending it by four years to 2026. Today the Government have laid the regulations for the scheme.

The last iteration of the Energy Company Obligation scheme, EC03, came to an end on 31 March 2022 and since 1 April 2022, EC03 measures could continue to be delivered to previous scheme rules—subject to some exceptions—until 30 June 2022. Similarly, suppliers have had the option to deliver to the new scheme, EC04, rules from 1 April 2022.

EC04 will be focused on low-income and vulnerable households in Energy Performance Certificate (EPC) Band D-G homes. The scheme will bring positive value to society, with estimated installations of around 800,000 measures in around 450,000 homes. Households could save on average £290 annually off their energy bills over the lifetime, or up to £1,600 in the least energy efficient homes. However, those savings could average £600 next winter. 360,000 homes will be upgraded to EPC Band C, helping more households out of fuel poverty.

Government will mandate minimum energy efficiency improvements requiring Energy Performance Certificate (EPC) Band F and G homes to be improved to a minimum Band D and Band D and E homes to be improved to a minimum Band C, contributing to our statutory fuel poverty target and interim milestone.

To make greater progress on upgrading the least energy efficient homes, there is a minimum target of upgrading 150,000 Energy Performance Certificate (EPC) Band E, F and G private tenure homes. This will ensure the least energy efficient homes are not left behind. Furthermore, a minimum target of 90,000 solid wall insulation measures is introduced to maintain the focus on insulating harder to treat homes, while supporting the solid wall insulation industry.

Under the scheme, support for repairs and replacements of broken gas and electric storage heating systems will be limited to 5,000 homes per year and the repair of inefficient oil and liquefied petroleum gas (LPG) systems will be permitted as a last resort where renewable heating cannot be installed. This will ensure measures installed under EC04 align with the Government’s Heat and Buildings Strategy and net zero targets.

Homes in off-gas rural areas will be incentivised in Scotland and Wales, to ensure homes that may be harder to reach and more expensive to deliver are not left behind. EC04 has been designed to complement the Home Upgrade Grant in off-gas homes in England, social housing funding and the private rented sector regulations. It will continue to work alongside existing energy efficiency and fuel poverty policies in Scotland and Wales.

Up to 50% of a supplier’s obligation may be delivered under the reformed Flexible Eligibility mechanism (EC04 Flex), an increase from 25% under the previous scheme. EC04 Flex enables local authorities, the Scottish and Welsh Governments and energy suppliers to target and refer other low-income households who may not be in receipt of means tested benefits.

A new scoring methodology will be introduced, providing greater support to the worst performing homes. Support will continue for new and innovative installation methods and measures via a reformed innovation measure mechanism. Only fully tested measures with adequate consumer protection will be eligible.

This expansion of the scheme forms part of the wider support package to help households with rising energy bills.

In May, in recognition of increased cost of living and continued rising energy costs, a package of support worth £37 billion was announced, which includes the Energy Bills Support Scheme. Most vulnerable households will receive at least £1,200 of support this year and, all households will receive a £400 grant as a credit from energy suppliers from October 2022 onwards, which does not need to be repaid.

[HCWS125]

Low-carbon Off-gas Grid Heating

Greg Hands Excerpts

Thursday 16th June 2022 Westminster Hall

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

I congratulate my right hon. Friend the Member for Clwyd West (Mr Jones) on securing this important debate. I reassure him that decarbonising heat remains a key priority. We recognise that this is a deeply worrying time for most of our constituents, for whom the impact of rising energy bills is perhaps the biggest concern. That applies as much to rural communities as to any other.

I commend my right hon. Friend for his long-standing work as one of the key voices for north Wales ever since we were both first elected in 2005. At the time, he was the first Conservative Member to be elected in north Wales in about eight years, and he has consistently stuck up for his constituents ever since.

We are taking action on bills. The Chancellor recently announced a £15 billion package—as part of an overall £37 billion this year—to help families who are struggling with their bills. However, as we set out in our recent British energy security strategy, which was launched by the Prime Minister and the Secretary of State in April, if we are to keep prices down for ordinary households and businesses for the long term, we need to rely on affordable, clean and, above all, secure sources of energy.

Off-gas-grid households and businesses already understand those challenges as well as anyone. Many of them rely on traditional forms of energy such as oil for their heating needs, so they have been particularly exposed to the impact of rising global energy costs. Of course, compared with other buildings, properties off the gas grid are some of the biggest emitters, so transitioning those properties to low-carbon heat is a key Government priority. That will not only put us on track for our different obligations, but it will help to move us off imported oil, build our energy independence and help to protect consumers from high and volatile energy prices.

As Members from all four nations of the United Kingdom have recognised during the debate—showing that we are better together when it comes to approaching these matters—the problem is not necessarily confined to the remoter parts of England, Scotland, Wales and Northern Ireland. We heard from my hon. Friend the Member for Buckingham (Greg Smith), and I know that parts of Kent and other counties that might be regarded more traditionally as the home counties also have large numbers of off-gas-grid properties.

As my right hon. Friend very ably said, most off-grid properties will ultimately transition to heat pumps, which are a proven and highly efficient technology. In electricity, they benefit from a secure energy source that is not subject to the same price spikes as oil, and critically, they are consistent with net zero as the electricity grid decarbonises. Heat pumps have been successfully deployed in high numbers across the world, including in countries that are colder than the United Kingdom, such as Sweden and Norway.

The up-front cost of installing low-carbon heating may be prohibitive for some, however, and I think that is the core of the question before us. That is why we are investing £450 million through the boiler upgrade scheme to provide £5,000 grants towards the cost of installing a heat pump, and £1.1 billion through the home upgrade grant to help lower-income households off the gas grid to upgrade their energy efficiency, save on bills and transition to low-carbon heating. That funding will help to kick off our wider plans to grow the heat-pump market to 600,000 installations by 2028 and to deliver on our ambition to reduce the cost of a heat pump by between 25% and 50% by the middle of the decade.

Alongside our action to remove distortions in energy prices—starting with the launch of our proposals to rebalance energy costs later in 2022—we anticipate that heat pumps will be no more expensive to install and run overall than gas boilers by the second half of the decade. That is why we consulted last year on regulations that would end the installation of high-carbon fossil fuel heating systems off the gas grid later this decade. I reassure my right hon. Friend that we will take every step to ensure that the transition to clean heat will be fair and affordable for off-gas grid households and businesses.

I also reiterate that our continued support for decarbonisation policies relying on heat pumps is contingent on the industry taking action to drive down the costs. By signalling now our intention to take the action later, once the cost of heat pumps is much lower than today, we aim to give industry the long-term confidence to invest and drive the costs down. We will also keep the cost of heat pumps under constant review. Making sure they become more affordable is a key part of Government policy and, well ahead of implementing any regulation, we will set out what additional actions may be needed to support the phasing out of high-carbon heating systems.

I also take the chance to reassure my right hon. Friend the Member for Clwyd West that no one will be required to install an unsuitable technology in their home or business. We know well that heat pumps will not work everywhere, at least not with the current technology. Some off-grid properties are simply too poorly insulated or have certain characteristics that would make installing the technology impossible. We will take care to ensure that that group of hard-to-treat properties will have access to suitable alternatives, such as high-temperature heat pumps, solid biomass and so on, which I will explain in a little more detail.

My right hon. Friend the Member for Clwyd West raised various points. I believe his central question was: why off grid first? Off the gas grid, there is currently no strategic option to decarbonise heat with hydrogen or other technologies. That is why we are taking a range of actions to bring forward the decarbonisation of this critical group of buildings. If we can make heat pumps affordable, there are considerable advantages in moving forward, including for off-grid households and businesses, even if that means that they will be required to switch from fossil fuel heat earlier than their on-grid counterparts. My right hon. Friend asked me to reconsider the 2026 deadline. Equally, the pace at which we can make heat pumps become affordable will guide our decisions on the right time to introduce regulation and the other actions needed to make a fair transition.

My right hon. Friend asked how many off-grid homes are hard to treat. Our analysis shows that 80% of off-grid homes already have sufficient insulation for a heat pump to work effectively. They have already been deployed successfully in high numbers across the world; I mentioned Sweden, Norway and other countries. On his questions about hybrids and biofuels, along with those from my hon. Friend the Member for Buckingham, we would like to see those fuels become another solution, particularly for off-grid properties that cannot use a heat pump. We are working closely with industry to build the evidence that will inform the biomass strategy mentioned by my hon. Friend, due to launch later in 2022. The strategy will review the amount of sustainable biomass likely to be available to the UK and set out how this can be best used across the economy to achieve our net zero targets.

My hon. Friend the Member for Buckingham asked for some good news. I think I have been bringing quite a lot of good news so far. However, we are also investigating whether hybrid systems could give hard-to-treat properties additional choices and that is an area of active investigation, as we also ask whether they have potential to help us stretch limited bioresources further. I urge my hon. Friend to wait for the biomass strategy later this year. There are key considerations there in biomass production, alternative uses and trying to get a sense of where that overall market will be heading. In time, renewable liquid fuels such as HVO and bioLPG may also play a role, although they are currently in short supply and more expensive for households to use. We need to better understand the scope to expand production of those fuels for use in heat, consistent with very low emissions while remaining affordable for consumers.

The hon. Member for Ceredigion (Ben Lake) mentioned those not subject to the energy price cap. It is worth remembering that the energy price cap, which predates me in this job, was not introduced to provide a blanket level of protection for all consumers, but was instead a specific protection brought in to remove the penalty for people who did not switch between their grid gas or electricity provider. That was the purpose of the price cap. I do not think it would be fair to say that the heating oil market or the market for off-grid properties is any less competitive. There is a highly competitive market in heating oil companies, and there is the ability for the Competition and Markets Authority to look at the issue. If the hon. Member for Ceredigion has evidence of anti-competitive practices, I urge him to bring it forward, send it on to me or speak to the CMA. That is exactly what the CMA is there for.

[Drew Hendry]

The Minister is saying that if there is an issue with off-gas grid households, it should be brought to the CMA. Does he support the basic ask to get Ofgem involved in regulating off-gas grid areas? A very simple solution would be for Ofgem to take action directly.

[Greg Hands]

We have to think about the nature of that market, which I am satisfied the CMA has the ability to regulate. Although it involves an energy product, that does not mean that Ofgem, rather than the CMA, is best positioned to provide the oversight to prevent anti-competitive practices. There is a lot of Government support for off-grid properties, as there is for on-grid ones, including the £400 payment and the £150 council tax discount in England, with Barnett consequentials for Wales, Scotland and Northern Ireland.

[Ben Lake]

The Minister has jogged my memory. Some farmers have told me they have commercial electricity contracts to service their homes, and are therefore worried that they may not receive the £400 payment. I know the Government are looking at the technical details, so perhaps he could take that point back and ensure that it is addressed.

[Greg Hands]

Of course, energy prices for businesses attract a lot of very keen Government attention. The hon. Gentleman is right to suggest that there was a consultation on the workings of the scheme, which has closed; the Government will respond shortly. Energy costs for businesses is an area of active Government interest. We provide a lot of support for energy-intensive industries, and want to ensure that overall we have a sustainable position, whereby businesses are able to afford energy bills in order to continue the vital work that they do for us across the rest of the economy.

Many of the additional Government support measures, including the warm home discount, the winter fuel payment and the cold weather payment, are also available for those off the gas grid. Energy efficiency measures are a major area of Government investment, with £6.6 billion to be provided over the course of this Parliament. I have already mentioned the boiler upgrade scheme, which costs £450 million, and the home upgrade grant, which amounts to £1.1 billion.

As somebody who used to work in a swimming pool, I was intrigued by what the hon. Member for Ceredigion described as the difficulties facing the swimming pool in his constituency. The great news is that one of the Chancellor’s key announcements this year was the reduction of VAT on solar panels. I am sure Plaid Cymru was very supportive of the Chancellor’s overall package of measures, which will bring particular benefit to the swimming pool in the hon. Member’s constituency.

The use of hydrogen is an interesting question. Decisions will be made in the coming years on where we think hydrogen can be used as a source of heat. We will have to think about our hydrogen production capacity, and the alternative pressing needs for hydrogen, such as decarbonising industry and major forms of transportation, including maritime, heavy goods vehicles and aviation. There are a lot of potential uses of hydrogen, we will need to look at the option of using it to heat buildings before taking a decision, particularly given the other alternative uses of hydrogen.

The hon. Member for Ceredigion mentioned the rules around heating oil providers not providing less than 500 litres. I urge him to speak to the UK and Ireland Fuel Distributors Association, which is a helpful trade body. I think the basic problem is that providing small volumes of heating oil is likely to raise fixed costs, and therefore to make an inefficient market with ultimately more expensive provision. His motive is a good one—to try to make heating more affordable, in smaller pieces, for constituents who are facing trouble with their bills—but the perverse impact might be to raise the fixed costs of such deliveries, but I urge him to speak to UKIFDA, which is the real expert.

I congratulate the hon. Member for Strangford (Jim Shannon) on being the chair of the healthy homes and buildings all-party parliamentary group. We are of course keen to see Northern Ireland, like all parts of the United Kingdom—I stress that it is fantastic to have all four nations represented here today—play its full role in decarbonisation, and to ensure that it is supported during times of high prices. He said that he had learned that I speak to Gordon Lyons, the Northern Ireland Minister for the Economy, frequently and perhaps even weekly. In fact, I spoke to him only yesterday about ensuring that Northern Ireland’s renewable energy opportunities are boosted. The hon. Gentleman will also know that one of the key reasons that we are taking the approach that we are on the Northern Ireland protocol is to ensure that things such as the VAT cut on solar panels can be enjoyed as much by the people of Northern Ireland as by the people of England, Wales or Scotland. Watch this space; we are always keen to help in Northern Ireland.

The SNP spokesman, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), called UK Government support inadequate. Well, almost regardless of what we had announced as the level of support, I could have predicted that he would say that it was inadequate. I remind him—

[Drew Hendry]

Will the Minister give way?

[Greg Hands]

Just let me explain what the support is: £37 billion for consumers so far this year and a £450 million boiler upgrade scheme. The hon. Gentleman might talk about fuel poverty, which is a very serious issue, but I remind him that it is of course a devolved issue in Scotland. I have reason to believe that he may know one or two people in the Scottish Government, so I urge him to direct his inquiries on fuel poverty to his party colleagues in the Scottish Government. Of course I am happy to take his intervention, if he will tell us whether he has raised the issue of fuel poverty with the Scottish Government.

[Drew Hendry]

I am delighted that the Minister has allowed me to intervene. Can I just clear up a couple of things? I raise the issue of fuel poverty in every way I possibly can with every Government, but I think he has forgotten that energy is reserved to the UK Government; he should have a wee look at his brief just to check. My question is this: does he think that £8 per head spent on insulation in England is good compared with the £27 per head spent on insulation in Scotland?

[Greg Hands]

Insulation is only one part of the picture when it comes to energy efficiency. I am delighted that the hon. Gentleman has recognised, and reminded us all, that energy is reserved to the UK Government. That is always refreshing to hear. I keep telling people in Scotland, “Thank God it is reserved, so that we don’t have to embark on the anti-nuclear policies of the SNP, or the anti-oil and gas sector policies,” even though the main emphasis of the oil and gas sector is indeed in Scotland.

On the regulator of the gas grid, as I have said, the CMA can intervene. Gas and electricity markets are considered natural monopolies when it comes to the grid. They are characterised by high fixed costs and start-up costs. For those reasons, these markets fall under the remit of Ofgem regulation. The heating oil market—

[Dr Whitehead]

On the subject of support for these measures, the Minister does not appear to have spent any time talking about what support there might be for heat pumps. I am sure that the right hon. Member for Clwyd West (Mr Jones) would be interested to know how the support that has been put forward so far— 90,000 heat pumps installed up to 2025 under the boiler upgrade scheme—relates to the turnover of boilers in off-grid properties. Replacing all of those with heat pumps would take up the entire support scheme for heat pumps in one go, when that support is supposed to be for the whole United Kingdom. By the way, the target of installing 600,000 heat pumps by 2028 will clearly fail miserably.

[Greg Hands]

The hon. Gentleman raises a good question. It is born out of a common misconception, particularly in the Labour party, of what the boiler upgrade scheme is all about. He is expecting—maybe because that is ingrained in the Labour party—that it is the role of the Government to come by and install a new heat pump for everybody across the country. That is not the role of the Government. The role of the Government here is to help stimulate the market and ensure that the private sector makes the adjustment and provides the heat pumps. That is what it is about—not dividing up a £450 million boiler upgrade scheme by the number of people in Britain and working out that it is not enough money for every person to get a new heat pump.

The idea is to provide enough stimulus to the market so that it responds, and also to go with the grain of human nature; the phase-out date is 2035, because people’s gas boilers will naturally come up for renewal in the course of the next 12 years, and during those 12 years, they will be incentivised to purchase a heat pump, rather than a replacement gas boiler. The idea is to stimulate the market. I remember the response of the market when we announced the heat and buildings strategy. I clearly remember Octopus Energy saying that the grant should quite soon enable the cost of a heat pump to be comparable to that of a gas boiler, and to become competitive over the lifetime of that installation.

[Dr Whitehead]

Will the Minister give way?

[Greg Hands]

I need to leave a few minutes for my right hon. Friend the Member for Clwyd West to respond, so I will not take a further intervention.

The basis behind the boiler upgrade scheme is not to provide everybody with a new heat pump. The idea is for the Government to prime the private sector to be able to do exactly that. The hon. Member for Southampton, Test says that heat pumps do not always work, but they frequently do. They are the only proven, scalable technology to decarbonise heating, although there might be hydrogen and other technology developments in the future. As I have said, Sweden and Norway have done this at scale. We will ensure that heat pumps can only be installed on suitable properties, and that there is a greater degree of choice for less suitable properties.

The hon. Member for Southampton, Test said that off-grid properties are suffering more from the current price rises. If he is saying that off-grid properties are facing a bigger increase in their energy costs than on-grid properties, I invite him to send me some firm evidence of that.

To conclude, I reiterate that decarbonising buildings off the gas grid will be key to delivering on Government priorities. It will protect rural consumers and businesses from high and volatile energy costs, and further strengthen our energy independence. We are taking action, and will continue to act to ensure the transition is smooth, fair and affordable for off-grid households, and rural customers and businesses.

Draft Warm Home Discount (England and Wales) Regulations 2022

Greg Hands Excerpts

Wednesday 15th June 2022 General Committees

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

I beg to move,

That the Committee has considered the draft Warm Home Discount (England and Wales) Regulations 2022.

It is a pleasure to serve under your chairmanship, Mr Efford. The draft regulations were laid before the House on 12 May 2022. This year, we have witnessed an extraordinary and global increase in the cost of energy. The Government recognise that millions of households across the UK may need further support with the cost of living and have therefore announced additional support this year worth more than £37 billion, including targeted support for those on the lowest incomes. In that context, the warm home discount remains a key part of our approach to supporting low-income households and tackling fuel poverty.

The Government established the warm home discount in 2011. Since then, it has provided more than £3.3 billion in direct assistance to households. Primarily, that support has taken the form of direct rebates off household energy bills. In the 2020 energy White Paper, the Government committed to extend and expand the scheme, as well as to reform it to better target households in fuel poverty. The draft regulations will succeed the previous warm home discount regulations in England and Wales, and the Government will lay separate regulations for an expanded warm home discount scheme in Scotland that will be debated separately.

The draft regulations have six main provisions. First, the expanded annual spending envelope is set in the regulations. For winter 2022-23, the spending envelope is £474 million, rising each year thereafter.

Secondly, participating energy suppliers will be obligated to provide rebates directly off the energy bills of fuel-poor households. The value of the rebates for households is set at £150, which is an increase of £10. That means around 2.8 million households will receive a rebate every winter.

Thirdly, the scheme will continue to provide rebates to pensioners on the lowest incomes—that is, those in receipt of the guaranteed credit element of pension credit. That core group 1 of eligible pensioners has been a key feature of the scheme throughout its existence.

Fourthly, there will no longer be a broader group of other low-income and vulnerable households. Under the previous scheme, that group was required to apply to their supplier every year for a rebate. Even if eligible, those households were not guaranteed to receive a rebate, and the criteria varied by supplier. The Government are therefore creating a core group 2 of households on the lowest incomes and with the highest energy costs. The eligible households will be those that are in receipt of one of the qualifying means-tested benefits or tax credits and that meet a high energy cost threshold. Those households will be identified through data matching, using benefits data, property characteristics data and energy suppliers’ customer data. The Government intend to publish a statement setting out the exact details of eligibility, including the high energy cost threshold.

Fifthly, the draft regulations will make it mandatory for suppliers to contribute to industry initiatives. Such initiatives will allow suppliers to fund other financial and energy-related measures, such as financial assistance payments, debt write-off, benefit entitlement checks, energy advice and energy-efficiency measures. Industry initiatives will be set at £40 million for this winter and will rise each year thereafter. The regulations will also set minimum obligations and caps for financial assistance, recognising the value they provide while ensuring that other high-value industry initiative measures still receive funding.

In addition, the Government are maintaining aggregate and household-level caps on debt write-off, to avoid the measure being misused to produce bad debt. The last industry initiatives restriction is to limit the number of mains gas-powered boilers and central heating systems that can be installed. They will still be permitted to support particularly vulnerable customers during emergencies, but restricted to align with the heat and building strategy.

Sixthly and finally, the draft regulations set the thresholds for suppliers participating in the scheme. The Government are lowering the thresholds so that more energy suppliers will partake in the scheme and to reduce the barriers to customers switching suppliers. In 2022-23, the threshold will be set at 50,000 domestic customer accounts, and from 2023-24 this will be set at just 1,000 accounts. This will mean that 99.9% of the market will be covered.

On the impacts, the Government are expanding the scheme to provide rebates to 750,000 more households. Thanks to these reforms, the vast majority of eligible households will receive their rebates automatically, without having to apply. A small minority will be contacted and required to contact a helpline to confirm their details. The Government’s analysis shows that, by focusing the support to households on the lowest incomes, the fuel poverty targeting rate will increase to 47% overall. Furthermore, 560,000 more fuel-poor households will receive a rebate, compared with an unreformed scheme.

The Government held a consultation on the reforms last summer and published the Government response in April. The consultation responses supported extending and expanding the scheme, as well as the proposals for reform. The Government are therefore proceeding with the main proposals. However, we decided to make a number of changes in the light of the responses. First, we have added housing benefit to the list of qualifying benefits and tax credits in the eligibility criteria for the new core group 2.

Secondly, energy suppliers will be required to provide estimates of the value and proportion of spending under industry initiatives in relation to households where a person has a disability or health condition. This will enable the Government to monitor the level of support provided to disabled customers.

Thirdly, the Government have removed the proposed mid-year adjustment to the industry initiatives budget. That proposal risked the creation of significant uncertainty in delivery risks.

Lastly, the Government are keeping the overall debt write-off cap under industry initiatives at £6 million per annum.

In conclusion, the warm home discount remains a source of critical support for low-income households at this difficult time. The draft regulations extend the scheme, expand the support to more households and focus the support to those most in need. I commend the regulations to the Committee.

--- Later in debate ---

[Greg Hands]

I thank the Opposition and welcome their support in principle for these important measures, which will expand the scheme and deliver more money to people, in particular over the course of this coming winter. It is important that we do not lose sight of the centrality and importance of what the Government are doing, on top of the other bill-support measures that we have introduced—to which I will refer, because they are relevant to some of the questions I was asked.

The hon. Member for Southampton, Test always gives such proposals a forensic eye. He correctly said that this is money not from the Government, but from other bill payers He was absolutely right and we should not lose sight of that. His proposal, if I understood it correctly, was to expand the numbers, which the hon. Member for Cardiff West also said. It is worth pointing out, however, that expanding the numbers of those who receive the benefit would add to the effective cost, and that would be passed on by the supplier to those who are paying. We should not lose sight of that. He calls for more people to be given it, and I am open to that. If he wants to send me a proposal of how he thinks the warm home discount would look under Labour, perhaps with some costings and the possible impact on the other bill payers, I am happy to look at it.

[Kevin Brennan]

The Minister makes a reasonable point, as ever, but his civil servants could work up such a proposal for him. However, what was the reason for the policy choice he made to cover only 2.79 million households, when the Government’s own figures state that 3.2 million households are in fuel poverty?

[Greg Hands]

I am coming on to that in a moment, but let us not get away from the increase that we have just made: the 2.2 million people who currently qualify will rise to 2.8 million people. That is a significant expansion of the scheme. The hon. Member for Southampton, Test was right that going from £14 to £19 is no mean increase for other bill payers, and we should not lose sight of the wider impact of the scheme on other bill payers, but with all such things, it is a question of getting the balance right.

The hon. Gentleman also asked about the automatic discount. One of the great things about its automatic nature is that it greatly reduces the administrative costs. When something becomes automatic, rather than on application, we reduce costs greatly. The recipients we reach will be more vulnerable households and, within the group, the households will be more vulnerable than those in the previous broader group. That is an important takeaway: more households, and the ones we reach are likely to be more vulnerable than under the previous scheme. The new scheme will be less bureaucratic and have lower costs, targeting more people who are in real need, compared with the existing scheme.

The hon. Member for Southampton, Test said that 50% of fuel-poor people are on means-tested benefit, but that figure is actually 69%. That, too, is an important consideration. I think he asked about—he implied—some sort of appeals process for those who might feel aggrieved with the automatic nature of the process. We will provide a digital helpline service, working closely with consumer organisations such as Citizens Advice and National Energy Action, to ensure that we put the best arrangement in place to support those who feel that the scheme has, for example, not adequately assessed their energy costs or some element of their particular household energy circumstances.

The hon. Gentleman asked about looking into the SOLR process to guarantee warm home discount rebates. He is right: the suppliers of last resort are not obliged to take on the warm home discount obligation of a failed supplier. However, we have had more than 20 of these SOLR processes—particularly in the course of the last year and especially last autumn. All suppliers of last resort have so far honoured their obligation in the past. We would expect them to continue to do so. Ofgem takes into account when appointing a supplier of last resort whether the new supplier intends to honour the obligation of the warm home discount.

I will turn now to the points raised by the hon. Member for Cardiff West on the impact on disabled customers. For the broader group, it is currently an application process, and making it an automatic process is likely to overall benefit disabled consumers. It is also worth pointing out the new support that has been announced. Disabled people will be supported with a cost of living payment coming up this autumn. There will be £150 on top of the other arrangements. They could well be receiving the new £650 grant for the lowest-income households. We are already here talking about an £800 extra for many disabled customers. It is characteristic of the hon. Member for Cardiff West to drill and dig deep into the numbers.

[Kevin Brennan]

Before the Minister moves on, can I pick up on what he just said about disabled customers? In the explanatory notes, the Government say that fewer households in which a person is in receipt of a disability benefit will receive a rebate. My question was: if fewer households in receipt of disability benefit will receive a rebate, what is the effect of the measures he is suggesting in this new scheme on people who will not receive a rebate anymore?

[Greg Hands]

I thank the hon. Gentleman for that intervention. I repeat what I said earlier. More vulnerable households will be receiving this benefit. Within that group, it will be the most vulnerable households that receive it. I think that is a really important thing to take away. I am happy to write to the hon. Gentleman on the specific numbers, if we have them, of disabled recipients currently in the broader group compared with what we think it might be in core group 2.

The hon. Gentleman has looked at the numbers and compared 2.8 million with around 3 million. We might have a debate on rounding, but I do not think it is fundamentally wrong to say somewhere around 3 million and then for the actual number to be around 2.8 million. I do not think that I was being disingenuous. What is important here is not his missing 200,000, but the fact that the Government are adding 600,000 people to the number of recipients, so it is rising from 2.2 million to 2.8 million. The hon. Gentleman may say there is a missing 200,000, but I say there is an extra 600,000 who are getting it. If the hon. Gentleman wants to propose an alternative costed scheme to me, I would be happy to look at it.

[Kevin Brennan]

I think that is slightly unfair of the Minister. I am only quoting the figure that was in the Government’s own White Paper and is at the beginning of their impact assessment and explanatory notes, which were both presented to the Committee today. It is not my figure; it is his.

[Greg Hands]

We may just disagree on rounding. It would not be the first time that 2.8 has been rounded up to being around 3. We can agree to differ. My point is that there are not 200,000 missing people; there are 600,000 extra people.

[Dr Whitehead]

Could we not say 3.2 million and round it down to 3 million?

[Greg Hands]

Again, I will return to my point. If the hon. Gentleman wants to make a proposal on behalf of the Labour party on how to restructure the warm home discount and how it should be paid for, I am all ears.

The extra number of households is actually leading, per constituency, to a much more considerable sum than the hon. Gentleman was suggesting. The amount of money going into the scheme means that our constituents are benefiting from a considerable increase in the amount of money coming into our constituencies—not a reduction, as he claimed. On the 3 million against the 2.8 million, I have just been reminded that it is not so much about rounding. The differences is about Scotland, because a different scheme will be announced for Scotland. The Scotland scheme will also reach around 200,000 households. That accounts for the difference.

While energy efficiency measures provide long-term assistance in reducing energy bills, there remains a clear need for direct financial support now. This scheme will ensure that 2.8 million households in England and Wales receive a rebate off their energy bill each winter until 2026 at least. The Government remain committed to helping low-income and vulnerable households to heat their homes over the winter. This is largest expansion of the scheme since it began in 2011. In 2021-22, the spending envelope was worth £354 million across Great Britain. In 2022-23, that is rising to £523 million. The expansion of the scheme will mean that around a third more households—not fewer, as the hon. Member for Cardiff West was claiming—will receive a rebate each year. These ambitious reforms to better target households in fuel poverty. The reforms enable the Government and energy suppliers to provide the support automatically and focus the support—the increased support—to those most in the need.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Warm Home Discount (England and Wales) Regulations 2022.

Future Hydrogen Economy

Greg Hands Excerpts

Tuesday 14th June 2022 Westminster Hall

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for Redcar (Jacob Young) on securing this important debate, on his incredible work and passionate advocacy for hydrogen ever since he arrived in the House, and on his chairing of the APPG on hydrogen.

This Government recognise that now, more than ever, we must focus on generating cheaper, cleaner power in Britain to support our long-term energy security and to achieve net zero by 2050. Hydrogen has the potential to help decarbonise vital UK industry sectors and to provide flexible energy across power, transport and, potentially, heat. Our drive for renewables makes hydrogen especially valuable. Excess renewable electricity can be used to produce hydrogen, which can be stored over time and used to generate electricity when there is less sun or wind to power the grid.

That is why in the British energy security strategy, published this April, we committed to doubling our ambition, as my hon. Friend the Member for Redcar and others have pointed out, to up to 10 GW of low-carbon hydrogen production capacity by 2030. As the hon. Member for Southampton, Test (Dr Whitehead) mentioned, at least half of that will come from green hydrogen, or electrolytic hydrogen, drawing on the scale of the UK’s offshore wind ambitions.

The energy security Bill announced in the Queen’s Speech will deliver on the commitment to build a sustainable homegrown energy system that is more secure, clean and affordable, and will include measures to facilitate the delivery of the hydrogen business model, driving investment across the UK.

The enormous potential of hydrogen for our economy is plain to see. In the UK alone, the sector could support 12,000 jobs by 2030 and unlock over £9 billion in private investment in the UK. By 2050—net zero date—the UK’s hydrogen economy could be worth up to £13 billion and support up to 100,000 jobs, many of which will be in our industrial heartlands.

I will address the specific points made by my hon. Friend the Member for Redcar, which were delivered with passionate advocacy in his excellent speech. On blending, we are on track to make a policy decision in 2023 and we are exploring whether to enable blending of up to 20% of hydrogen into GB gas networks.

We have invested £25 million in the BEIS Hy4Heat programme to develop hydrogen-ready boilers. We have to have certainty around the safety and efficiency of these systems, and assurances that consumers will not face a premium from the introduction of these boilers, but that remains an area of active work.

My hon. Friend the Member for Redcar passionately advocated for bringing the hydrogen village trial to Redcar. We expect the final location to be selected in 2023 and for it to become operational by 2025. We expect the trial to last a minimum of two years.

I heard directly from National Grid about Project Union a few weeks ago. It is a fascinating project that we will continue to study. My hon. Friend’s plea to extend the gas storage at Rough is a live conversation with Centrica, and it would not be appropriate for me to comment on that today.

[Dr Whitehead]

Will the Minister give way?

[Greg Hands]

I want to try to respond to the different contributions, but I will give way to the hon. Member for Southampton, Test.

[Dr Whitehead]

This is a very friendly intervention. For the record, will the Minister state the importance of the role hydrogen will play in industrial decarbonisation, particularly in industries such as steel, ceramics and cement? I am sure he will want to put that into the mix, as it were, as far as the deployment of hydrogen is concerned.

[Greg Hands]

The hon. Gentleman is absolutely right about the importance of industrial decarbonisation. That is one reason why we are following the cluster approach, to make sure that those hard to decarbonise industry sectors are close to those clusters.

I will group my response to the two contributions from the HyNet group—the hon. Member for City of Chester (Christian Matheson) and my hon. Friend the Member for Warrington South (Andy Carter)—if I may call them that. The hon. Member for City of Chester also mentioned powered aircraft and maritime, which are very much in the mix for using hydrogen for transport. I had an excellent visit to the constituency of my hon. Friend the Member for Warrington South towards the end of last year, when I saw the potential for the Novelis canning factory to use hydrogen and other means. I have just come from meeting my co-chair of the green jobs delivery group to make sure that the skills are there. On the caps and the impact on companies in the HyNet process, my Department is in regular contact with major cluster projects, including HyNet, about how the Government and the industry can work together to realise our 10 GW ambition as part of the CCUS cluster sequencing process. I am happy to write to my hon. Friend with further details about the companies in HyNet.

My hon. Friend the Member for Waveney (Peter Aldous), who is a passionate supporter of green energy right the way across the board, told us about the clean hydrogen cluster in East Anglia and the Lowestoft power plant project using hydrogen for municipal buses and the refuse fleet, which was also mentioned by the hon. Member for Aberdeen South (Stephen Flynn). On one of my many visits to Scotland, I was really excited to see the Whitelee wind farm just south of Glasgow, which is the second largest onshore wind farm anywhere in Europe. Last autumn, we launched a £9.4 million project with Scottish Power to take the excess onshore wind power generated at Whitelee and turn it into hydrogen for Glasgow’s buses and refuse carts—similar to the scheme mentioned by the hon. Member. By the way, I am looking forward to being in Aberdeen again this week for the fourth time in my nine months as Energy Minister.

The hon. Member for Birkenhead (Mick Whitley) made some good points about hydrogen. I think he also managed to squeeze in a quick swipe at the nuclear industry, so I urge him to think again. I am a bit surprised that he took a swipe at the nuclear industry, as I know that he is sponsored by Unite and other unions. The unions are among the biggest supporters of nuclear in this country, so I urge him to listen a bit more closely to his union sponsors’ support for the nuclear industry. I also note that he is on the Liverpool city region freeport management board, so he is clearly able to embrace new Government policies and take advantage of them bringing things to his district. I urge him to think again on nuclear.

My hon. Friend the Member for Broxtowe (Darren Henry), who is co-chair of the midlands engine APPG, is absolutely right to say that we need to lead on low-carbon hydrogen technology. The technology side of this issue is incredibly important.

As it happens, today I have talked about renewable and low-carbon energy with Gordon Lyons, the Northern Ireland Economy Minister and a party colleague of the hon. Member for Strangford (Jim Shannon), who is absolutely right to say that Northern Ireland will play a key role in the production and export of hydrogen.

In the brief time available, I will outline the next steps. We recently published a hydrogen investment package, which set out the key policy detail that industry has been waiting for, and paved the way for the launch of two significant funding mechanisms: the net zero hydrogen fund, and our hydrogen business model. The net zero hydrogen fund will be coming this summer, and we aim to run annual allocation rounds for electrolytic hydrogen as soon as legislation and market conditions allow, moving to price-competitive allocation by 2025. In July, we will announce the blue hydrogen projects that we will negotiate with the CCUS cluster sequencing process.

We have developed an investor road map to give more clarity on what we have done, what we are doing and what we are committed to doing in developing the UK hydrogen opportunity. We have already mentioned hydrogen transport storage infrastructure, and we have committed to design new business models for that by 2025. We have published a UK low-carbon hydrogen standard, because it is really important that we have a standard for what defines low-carbon hydrogen, and we have also published a hydrogen sector development action plan on supporting the UK supply chain for hydrogen.

I hope that my hon. Friend the Member for Redcar agrees that the Government have provided a clear long-term signal that we are committed to building a world-leading UK hydrogen economy. I thank him again for securing this timely and informative debate, and for allowing us to explore the role of hydrogen in our clean and affordable UK energy system.

My final point is that I was in Berlin in January and met my German opposite number, whose name is Stefan Kaufmann. I found out in advance that his expertise in hydrogen is so extensive that he is called Mr Hydrogen. I said to him, “Stefan, one day I want to be called Mr Hydrogen,” but then I thought that, actually, the person who really deserves the title of Mr Hydrogen in this country is my hon. Friend the Member for Redcar.

Storm Arwen Review: Final Report

Greg Hands Excerpts

Thursday 9th June 2022 Written Statements

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

The Energy Emergencies Executive Committee Storm Arwen review was commissioned in December 2021 by the Secretary of State for Business, Energy and Industrial Strategy, due to unacceptable levels of power disruption following Storm Arwen. The interim report was published in February 2022, and the final report has now been completed and published on gov.uk.

The review has been a joint endeavour between Government, industry and the regulator (Ofgem) with the aim of identifying lessons to be learned and actions to take forward. These actions will drive improvements to Great Britain’s electricity network resilience to severe weather events. The actions recommended by this review address concerns under the three pillars of system resilience, consumer protection and additional support.

The majority address improvements to be made across all electricity distribution network operators regardless of their impact during this particular storm. Lessons from subsequent storms that hit the UK in February 2022 have also been incorporated and reflected as part of this final report. While improvements will be made, no electricity system can be totally immune from disruption.

The Energy Emergencies Executive Committee will be responsible for the implementation of these actions, in collaboration with other partners as appropriate, alongside my Department which will ensure the delivery and implementation of the actions recommended.

[HCWS84]

Oral Answers to Questions

Greg Hands Excerpts

Tuesday 7th June 2022 Commons Chamber

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

Clean energy technologies are fundamental in both securing our energy supply and meeting net zero. This Conservative Government have set out their ambition to invest up to £22 billion in research and development by 2024. Meanwhile, we are moving to annual options for renewable energy and investing big in our nuclear future.

[David Johnston]

In recent months, I have had a number of emails from constituents who have taken the Government’s encouragement to look at getting a heat pump, but have found the cost just too high for them. What steps is my right hon. Friend taking to help bring down the cost of heat pumps so that they are more affordable for more people?

[Greg Hands]

My hon. Friend makes an important point. We want to go with the grain of human nature, which means that, when it is time to replace a gas boiler, the heat pump is a competitive option in terms of price. That is why we think the cost of heat pumps can reduce by 25% to 50% by 2025. We have our £450 million boiler upgrade scheme to provide capital grants of up to £6,000, and that is in addition to the zero per cent rate of VAT on installation.

[Chris Clarkson]

As we transition away from gas, hydrogen—in particular green hydrogen generated by renewable sources such as that at Scout Moor wind farm in my Heywood and Middleton constituency—gives the UK the unique opportunity to become an exporter of energy. Does my right hon. Friend agree that that is good not just for our economy and energy security, but for communities such as Heywood and Middleton where it will create new and exciting jobs?

[Greg Hands]

My hon. Friend is a doughty champion for his constituency and for the hydrogen sector. I was at the global hydrogen summit about three weeks ago where exactly the possibility of hydrogen exports was very much the topic of the day. That is why we have doubled the ambition in our British energy security strategy to go to 10 GW of low-carbon hydrogen production by 2030, which will provide fantastic opportunities right the way across the country, notably in his constituency as well.

[Mr Baker]

I am very keen to help the Government find viable paths to net zero, which is why I took a meeting with a firm that has developed a route to continuous power from tidal basins. Can I bring those people to meet my right hon. Friend to discuss how that solution, remarkable as it is, produces continuous, not intermittent, net zero power, so that he can learn more about what could be done?

[Greg Hands]

I thank my hon. Friend for his continued interest in all matters relating to net zero. My door is always open to him, particularly in bringing innovative proposals on how we will get to net zero. He will know that the Government have invested more than £175 million in tidal energy projects in the past two decades and we have £20 million allocated in the current allocation round for the contracts for difference for tidal stream power.

[Mr Speaker]

I call the Chair of the Business, Energy and Industrial Strategy Committee.

[Darren Jones (Bristol North West) (Lab)]

Yesterday, a Treasury Minister was unable to confirm whether the climate compatibility checkpoint would be applied to the recent tax cut for the oil and gas industry investing in further drilling. Can the Minister today confirm whether that climate checkpoint will apply to existing investment decisions and not just future investment decisions after the checkpoint has been introduced?

[Greg Hands]

As the Financial Secretary to the Treasury said yesterday, that consultation on the climate compatibility checkpoint has closed and the Government will be responding to that consultation in due course.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

A recent Public Accounts Committee report on net zero highlighted the real challenge of getting consumers onboard. Going net zero and embracing low- carbon technologies cannot be a preserve of the wealthiest and there needs to be much more work by Government. What are the Government doing to ensure that consumers are supported to make green choices?

[Greg Hands]

The hon. Lady raises some very good points. I am looking forward to appearing before the House of Lords Committee on this very topic on Thursday. I am sure that her Committee has done important work on this. We want to make this process as affordable as possible for people. That is why we have introduced the boiler upgrade scheme. That is why we are spending £6.6 billion of public money in this Parliament on energy efficiency, making sure that those options are there and are affordable. That is one of our key aims, particularly if we are to get to 600,000 heat pumps per annum by 2028.

[Geraint Davies (Swansea West) (Lab/Co-op)]

The Minister may know that our gas pipes are capable of taking 40% hydrogen, as they did with coal gas. Will he meet me and also Professor Andrew Barron who works at Swansea University, which is pushing forward technology to take the hydrogen produced by renewable wind farms off peak, converting it and putting it into the gas grid and therefore reducing the carbon footprint of boiling an egg by 40%. Surely that is the best way forward in the short term to reduce our carbon footprint.

[Greg Hands]

The hon. Gentleman raises a good point. Late last year when I visited the Whitelee wind farm just south of Glasgow, the UK’s largest onshore wind farm and the second largest in Europe, I saw for myself the potential there for renewable energy to convert to hydrogen. The UK Government announced a facility to assist with that. Blending is also an important aspect that we will actively be looking at. Of course we will have a number of other important uses of hydrogen, notably in maritime, transportation and the decarbonisation of industry, and those are all in the frame for consideration for what will undoubtedly be our big need for hydrogen in the future.

[Dr Luke Evans (Bosworth) (Con)]

4. What recent discussions he has had with representatives of businesses on the rules in respect of the Apprenticeship Levy.

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[Judith Cummins (Bradford South) (Lab)]

8. What steps his Department is taking to help ensure affordable energy provision during winter 2022-23.

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

The Government have announced a package of support measures totalling over £37 billion this year. It includes a £400 grant to households to help them with their energy bills when that is needed most.

[Judith Cummins]

Two weeks ago, we found out that we have a huge surplus of national gas but nowhere to store it. That was swiftly followed by the announcement that as many as 6 million households face power cuts this winter because of gas shortages. Will the Minister give a guarantee today that this Government can keep the lights on for both households and industry this winter? A business in my constituency told me that its energy bills have soared from £7 million to £35 million. What support are the Government giving to those energy-intensive industries?

[Greg Hands]

There is a lot in that question, but the scenario the hon. Lady paints is very extreme. She will know that we are looking actively at what we can do on the storage side. On producing energy, I find it a bit rich of the Labour party to criticise us. This is the party that said, in 1997, that there was no economic case for new nuclear power stations; the party that increased, rather than cut, our dependence on gas, which went from accounting for 32% of our electricity generation to 46% of it; and the party that failed to invest in renewables, which, over 10 years, have gone from accounting for 7% of our electricity generation to 43% of it. We will take no lessons from the Opposition on helping people with energy generation and with their bills.

[Rachael Maskell (York Central) (Lab/Co-op)]

11. What steps he is taking to support business and social business incubator and accelerator hubs.

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[Paul Blomfield (Sheffield Central) (Lab)]

15. Whether he plans to take further steps to improve the energy efficiency of domestic buildings.

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

The Government have announced a package of measures designed to support the most vulnerable in these unprecedented times. It includes support for the local authority delivery scheme, the home upgrade grant, the social housing decarbonisation fund and the boiler upgrade scheme, and takes our total funding across this Parliament to £6.6 billion.

[Paul Blomfield]

The Minister knows that reducing consumption is vital to households and to the country, but back in 2013 the Conservative-led Government cut energy efficiency programmes, which led to a 92% fall in home insulation; and the flagship green homes grant scheme was scrapped as a failure just six months after its launch. When will the Government commit to the ambitious programme of retro-insulation that we need if we are to cut emissions, slash family bills, reduce gas imports and create thousands of jobs?

[Greg Hands]

We are committed to that programme, and that is exactly why I have outlined the £6.6 billion of support in this Parliament. We have achievements as well: since 2010, the percentage of UK homes rated A to C for energy efficiency has gone from 13% to 46%. That is almost a fourfold increase under this Government in homes that are rated good for energy efficiency. We have put a lot of money into heat pumps and the heat and buildings strategy. I suggest that the hon. Member look at that strategy, which we launched only last October. He should study it and then come back with further questions.

[Mr Speaker]

I call Dame Maria Miller, and congratulate her on her damehood.

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[Mr Laurence Robertson (Tewkesbury) (Con)]

T2. I am sure that Ministers will join me in congratulating a Royal Mail depot in my constituency that has moved its fleet to electric vehicles. However, that does place a lot of demand on the system, so will Ministers ensure that, when formulating policy, industrial estates, for example, have sufficient electricity to enable even more of them to change to electric vehicles?

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

I know of my hon. Friend’s ongoing interest in all matters in relation to energy, and he makes an important point about big energy users such as the Royal Mail planning and ensuring that they are efficient and robust for the future. I will ensure that his point on industrial estates is reflected back to our Department, to the Department for Levelling Up, Housing and Communities and to other relevant Departments.

[Ian Byrne (Liverpool, West Derby) (Lab)]

T3. I have heard from constituents in West Derby how the use of fire and rehire tactics by employers such as British Gas and British Airways put them in unbearable situations during the pandemic. Shamefully, in the middle of a cost of living crisis, we see many rogue employees across all sectors utilising those immoral practices on a daily basis to drive people into poverty. As my hon. Friend the Member for West Lancashire (Rosie Cooper) made clear, we need employment legislation now and the outright outlawing of the despicable practice of fire and rehire. Can the Minister justify why workers should accept anything less from the Government?

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[Greg Hands]

We are engaging constantly to make sure that consumers are getting a fair deal. You would expect us to do so, Mr Speaker, after our 5p fuel reduction following 12 years of freezes and £5 billion of relief. It is vital that we see that saving being passed on to consumers. That is why my right hon. Friend the Business Secretary and I meet regularly with the sector and will continue to work closely with the CMA to analyse the workings of the market and make sure our constituents get those reductions.

[Christine Jardine (Edinburgh West) (LD)]

Exactly what steps is the Department taking to reduce the prohibitive bureaucracy facing scientists trying to access the very welcome £50 million funding for research into motor neurone disease, a horrifying disease that affects more than 5,000 people in this country? The research was announced in November last year, but they have faced those problems.

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[Helen Morgan (North Shropshire) (LD)]

Diesel and petrol prices have hit a record average high this morning, with diesel costing more than £1.85 a litre. Along with labour shortages, that is having a devastating impact on haulage businesses in North Shropshire and across the rest of the country, as well as driving inflation in the economy. What steps is the Secretary of State taking to support this critical industry through these dual crises?

[Greg Hands]

As I said to my hon. Friend the Member for Newbury (Laura Farris), we are engaging constantly with the sector and the CMA to make sure that the tax cut is passed on. However, I find it a bit rich for the Liberal Democrats, who, if I am not mistaken, voted against all the fuel freezes and this year’s Budget, to then claim that the reduction in fuel duty, which they opposed, is now not being passed on to their constituents. If they had voted for the reduction in the first place, I would have a lot more sympathy with their position.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

We have been trying to find out today exactly what the Secretary of State’s job is, because he kept saying “That is not my job”. May I remind him that he is responsible for energy and that, in the recent energy strategy, energy from waste was hardly mentioned? It could produce 20% of our energy needs. Why is he ignoring that?