Gas Prices and Energy Suppliers

Alan Brown Excerpts

Thursday 23rd September 2021 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

This is not market failure; it is Government and regulator failure. Ofgem all along had the financial and hedging information to know which companies were at risk, so why are we now in crisis management phase?

The Tories promised us cheaper energy bills post Brexit, but right now electricity wholesale prices in the UK are the highest in the whole of Europe. Meanwhile, as gas prices increase, the Treasury gets extra VAT receipts and increased oil and gas revenues. Surely, there must be a redistribution of that increased Treasury income to help hard-pressed bill payers. At the moment, it is those bill payers who cover the additional cost of transferring customers to other energy suppliers. They cover the credit of customers with failed companies and then have to pay increased tariffs when transferred. The cap might stay but the cap does not stop energy bills going up, so why should bill payers pay even more money when the Treasury is getting increased revenue out of this? What is the additional estimated cost for bill payers?

A quarter of our electricity bills consist of levies, so as we move away from our reliance on fossil fuels, we need a fundamental shift in how that concession is paid for. That is something that the Treasury needs to address. It means ending the grid charging regime so that Scotland does not have the highest charges in Europe, and it means giving the go-ahead to pumped hydro storage in wave and tidal.

Finally, is the Secretary of State happy to sit by while the cost of living crisis is ongoing? Is he happy to plunge 500,000 extra people into fuel poverty, or will he fight the Treasury to end the universal credit cut and release extra money to help hard-pressed bill payers?

[Kwasi Kwarteng]

Clearly there was a lot in that question and statement. I will deal with a couple of issues, if I may.

With respect to universal credit and wider budgetary considerations, I have repeatedly said that they are matters for my right hon. Friend the Chancellor. We will have ample opportunity to discuss these things in the House. With respect to the move away from fossil fuels, the hon. Gentleman and I are in agreement: I think that we need a diverse supply of decarbonised sources of energy.

Finally, I dispute the idea that we are ill-prepared. We have the SOLR and SAR processes in place and we stress-tested them throughout the whole covid period, when I was in constant contact with the industry. I feel that so far we have managed to accommodate such supplier failure as we have seen with existing structures.