Energy Prices Bill

Lord Bishop of Manchester Excerpts

2nd reading
Wednesday 19th October 2022 Lords Chamber

[The Lord Bishop of Manchester]

My Lords, I am pleased to speak on this important and urgent piece of legislation. I declare my interest as deputy chair of the Church Commissioners’ board of governors. We own stocks in energy companies. In the light of today’s developments in the other place, I should perhaps also declare that I regularly eat tofu.

It is clear that the ongoing cost of living crisis and energy insecurity necessitate swift and comprehensive action. It is estimated that this will adversely impact up to 100,000 households in one of my local authorities, Manchester, this winter. A report published in August by the University of York predicted that more than three quarters of UK households—53 million people—will have been pushed into fuel poverty by January next. It is therefore very welcome that the Government are taking action to help the public and businesses survive the coming winter. It is also good to have the clarity set out in the Bill on the energy price guarantee and the energy bill relief scheme.

However, welcoming the Bill does not mean that I, or my colleagues on these Benches when they are here, believe that it is a latter-day Mary Poppins—practically perfect in every way. While we fully recognise the urgency of this legislation, we hope that His Majesty’s Government will take seriously the calls to amend certain of its details before we reach Committee next week.

The energy price guarantee, setting a limit to the amount households can be charged per unit of gas and electricity, is clearly needed as prices continue to rise rapidly. However, it is questionable whether this should include a temporary suspension of green levies. As Energy UK said earlier this year, reducing support for

“the very solutions that will prevent a repeat of the current crisis”

would not be

“the wisest move”.

Now is the moment not only to tackle the current crisis but to double down on the strategies that will reduce, and eventually eliminate, this nation’s need for imported fuel—a need that puts us at the mercy of the international markets.

The energy bill relief scheme’s support of non-domestic customers is also very necessary. The challenge that businesses, schools, hospitals, churches and many others face is huge. Many of my churches are now working on plans to join the Warm Welcome initiative. They will extend their opening hours through the winter to offer a place for local people to cut their fuel costs by spending less time at home. Warm churches, many with free wi-fi and even free hot drinks, have a key role to play—although I confess that I never imagined, until recently, that I would be commending Church of England buildings to your Lordships’ House for their cosy warmth.

But—and here is the issue—extended opening will lead to even heavier fuel bills. Last week we announced £15 million from Church Commissioners’ funds to help keep our churches warm this winter, but that will go only part of the way. We need further clarity from the Government on how the non-domestic scheme will work in practice.

When we legislate in haste, without the usual opportunities for consultation and debate—as I accept we now must—one golden rule should be that we legislate for the minimum period necessary and with the minimum scope for Ministers to build on that legislation without full public and parliamentary scrutiny. In several respects, as earlier speakers have indicated, the Bill in its present form fails that vital test.

It is of concern that the Bill grants the Secretary of State powers to end the tariff cap when they choose, as well as broad powers to amend the energy price guarantee and energy bill relief scheme. The uncertainty surrounding the tariff cap’s duration, as the noble Baroness, Lady Worthington, has just reminded us, will likely make it more challenging to give energy suppliers the certainty they need to purchase gas and electricity in advance for customers. It is concerning that, while the Government intend these measures to be temporary, the Bill assumes they will last for a minimum of five years—longer than however many Home Secretaries and Chancellors from recent times put together.

As drafted, the Bill lacks important definitions. The term “energy crisis” is left very broad and not clarified. Further definition of this term would be greatly beneficial to ensure that such emergency power measures are used at, and only at, the appropriate time. Secondly, the Bill does not include a definition of the policy instrument it seeks to introduce. Clarifying this would surely improve the Bill. Finally, we must also ensure that, in our desire to address the very immediate and acute crisis of paying our energy bills, we are enabling and not thwarting medium-term and long-term responses to the UK’s energy security situation.

To conclude, I am sure that all noble Lords here today recognise the timely nature of these measures and welcome them overall. I urge the Government to look to improve the details of the Bill further. While I am not personally able to be in my place next Monday, my most reverend and right reverend friends on these Benches will consider tabling or supporting amendments in any areas where we feel that His Majesty’s Government have not proposed satisfactory changes to the draft legislation in response to the issues that I have raised today.

Energy Security Strategy

Lord Bishop of Manchester Excerpts

Wednesday 27th April 2022 Lords Chamber

[Lord Callanan (Con)]

The noble Lord raises a number of important points. On the biomass supplying Drax, he is right that it is mainly produced from waste-wood sources that would otherwise not be utilised. I think he was agreeing that that was a mistake on the part of the Labour Government, who got elected in 1997 on a manifesto that said there was no case for new nuclear. It is easy for us to look back at mistakes made in the past but in retrospect, that was a mistake. This comes back to the point made by the noble Lord, Lord Kerr: that in an advanced industrial country, this infrastructure takes many years to put in place. We let the UK nuclear industry wither on the vine because, of course, at the time we had ample supplies of clean gas and not so much concentration on climate change.

The noble Lord is in essence right about rare earths, but the Government are very well aware of this. A number of innovative battery technologies are also being developed but we are looking very closely at the necessity of various rare earths for existing battery technology, such as cobalt and lithium, and at where alternative supplies can be procured.

[The Lord Bishop of Manchester]

My Lords, I declare my interest as both a Church Commissioner and a board member of a housing association. As things stand, a community with local renewable generation is not allowed to sell the energy it generates directly to local people. Instead, it has to sell it to a utility, which sells it on to customers, creating disproportionate costs. Moreover, community-level generation could be further promoted by ensuring that new housing developments include green energy or even a requirement that they place no increased demand on the grid by generating more of their energy needs. The Bible assures us that the sun shines on both the righteous and the unrighteous. Indeed, I can assure the Minister that it does so even in my notoriously rainy city of Manchester. Can he outline what will be done to promote greater take-up of community energy generation programmes?

[Lord Callanan (Con)]

I thank the right reverend Prelate for saying that the sun shines on all of us—I am delighted to hear that. Community energy is important and we are supporting a number of community projects within Ofgem. I realise that there is a campaign to increase the take-up of community energy and we are in principle supportive of that. However, if those community energy projects also wish to be connected to the national grid and take advantage of other forms of energy and supply, it is right that they pay a proportionate share of costs for that. They are not insulating themselves from the national grid and from other forms of energy production and supply. Nevertheless, we want to see what we can do to support community energy, Ofgem is engaged in it, and we will look at what more we can do to help.