Draft Green Gas Support Scheme (Amendment) Regulations 2023

Alan Whitehead Excerpts

Wednesday 22nd November 2023 General Committees

[Dr Alan Whitehead (Southampton, Test) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Murray; we seem to be meeting rather frequently today, but that is always a pleasure.

The SI concerns the green gas support scheme, which is a scheme that I advocated for a very long time. I was delighted when it came in in 2021, and it has proved very successful in bringing about substantial advances in biomethane production and substantial increases in the amount of biomethane injected into the grid, thereby decarbonising the gas grid to a considerable degree. I hope it continues to be successful. We have to be careful that people who are in favour of sustainable aviation fuel do not seek to pinch that biomethane in the not-too-distant future, but that is perhaps a debate for another day.

As the Minister outlined, the instrument makes some very minor changes that streamline and make more efficient the operation of the scheme. Those are unexceptional changes, which we certainly support. I have two very brief questions—or rather, one brief question and a suggestion—as far as the changes are concerned. I would be grateful if the Minister could respond, and I am sure he will do so very briefly and succinctly when we get to that in a moment.

The first issue is that, as hon. Members will have seen, the interest that accrued in Ofgem’s account from the levy was, from the beginning of the scheme, added to, rather than deducted from, the levy collection target. Of course, that does not make much sense unless it was a mistake when it was first introduced in the framework. This instrument changes that addition to a deduction. My question is, what has happened to what appears to be an over-collection into the levy from gas suppliers, which are levied for the purpose of the support scheme? I am not a great advocate of handing back money that has been collected to make a scheme work, but has the Minister ever received any complaint or concern from the gas industry that it was being over-levied and would like its money back? I would imagine that, otherwise, it would stay in the support scheme and therefore make the MLA more appropriate to enabling the scheme to last longer.

The other point, which the Minister has mentioned, is that the maximum levy amount in the scheme is designed to, among other things, cope with the maximum point at which the levy is likely to be called on. It is a sensible change to make that maximum point rather more flexible on the decision of the Secretary of State. We want the levy to remain sufficiently flexible to finance the green gas support scheme after 2028-29, because we hope it will go on considerably longer than that.

Although the change is positive, it seems to me a little clunky. It is a fixed rate which requires the Secretary of State to take a decision on it. At that distance in the future, it is quite likely that inflation will begin to eat into the MLA seam. It might have been a better idea to index the MLA against inflation over the periods, leaving the Minister to take a decision only in the event that matters proved adverse to the passage of inflation over a period of time, rather than having to take a decision should things need adjusting even within that parameter.

Those are my only two comments on the scheme. I am sure the Minister will be delighted to know that I am going to stop very shortly.

[Graham Stuart]

Promises, promises!

[Dr Whitehead]

Those two clarifications would be very helpful to understand exactly where the changes to the scheme can best go, and whether we need to do any more work to make sure these amendments to the scheme stick as well as they are clearly intended to.