Out-of-Turn Supplementary Estimates 2022-23

Alison Thewliss Excerpts

Monday 24th October 2022 Commons Chamber

[Alison Thewliss (Glasgow Central) (SNP)]

It is odd to be agreeing on the spending of such phenomenal amounts of money in a near-empty Chamber. It would perhaps be sensible for the House to scrutinise such matters slightly more than this, but I am sure that those of us here will do our best.

These are incredibly significant changes compared with the main estimates passed by this House just in July, and the sums of money going to the energy support package and the asset purchase facility are eyewatering. I would be interested to hear from the Minister about the relationship between the money for the asset purchase facility, and the disastrous impact of the mini-Budget, because it strikes me that all this is coming at the worst possible time. Ordinary taxpayers have been left paying the price for the UK Government’s reckless mini-Budget, with Government bonds incurring a loss for the first time since 2009. The Office for National Statistics projected the loss to taxpayers just last month at £156 million, and even with the changes that the UK Government have made since the mini-Budget and its reversal, there has been significant damage to the UK’s fiscal outlook.

What is the relationship between the intervention that the Bank of England had to make during the past couple of weeks and the interventions being paid for in these estimates? Last week, in a letter to MPs on the Treasury Committee, the Bank of England’s Deputy Governor for Financial Stability noted:

“There has been a particular increase in volatility in the UK markets…The five largest daily moves in the 30-year inflation-linked gilt, in data that dates back to 2000, have all been since the 23 September”.

That was, of course, the day of the mini-Budget, which has had a significant and long-lasting impact on the credibility of the UK Government and their ability to manage the economy. What further discussions have Ministers had with the Bank of England? The Bank was clear to the Treasury Committee that it did not have a full briefing ahead of the mini-Budget, and it told the Committee:

“Had they asked us what the market reaction would be, we would have interacted with them.”

Such interaction by the Government with experts who would have told them that their decisions were not particularly wise seems to be lacking. If there is anything to be said for the new Government, perhaps they will consult experts and listen to them more than those who are leaving the Government fairly soon.

On the energy support package, I have a lot of concern for my constituents—both businesses and individuals—come April. People who run businesses have been in touch with me. They want to know what will happen with the business support scheme come April, because as yet there has been no clarity on that from the UK Government. There has also been little clarity about what will happen for individuals. This had been talked about as a two-year support package, which gave people a sense of relief, and a sense that even if prices are higher, at least they know they will be slightly more secure. The measures that have been introduced have ripped up that guarantee entirely, and people are incredibly worried about it.

Let me give an example from my Friday surgery at Toryglen community base. Toryglen is one of the community hubs that we all depend on in our constituencies. It runs various events, is a hub for many different things, and has a nursery as part of its building. Its gas bill has gone from £9,700 a year to £62,273.36—[Interruption.] I see the Minister raising his eyebrows at that, but that is the increase. There is no way that any organisation, whether a company or a charitable organisation such as Toryglen community base, can afford that. I implore Ministers to listen to people in those circumstances, because they have to sign those contracts. If they do not, it will cost them more than the £62,000 they have been quoted. There is no alternative for them, and they do not know what will happen come April. It is irresponsible for Ministers not to give clarity to organisations in such circumstances.

The energy provider helpfully gave Toryglen community base a printout, which it passed on to me, stating that the bill is a 539% increase. Nobody can meet that. Businesses will fold and charities will not be able to provide the services that we all depend on, and I want to know the UK Government’s answer to that point. Toryglen community base was also given a quote for the following year, 2024, of £50,287.59. It is not as if prices are falling to any significant extent, and even if it survives the coming year, the bill quoted for the year afterwards is still huge, yet the energy price guarantee for businesses finishes in April. The Minister must explain what will happen to such businesses. We appreciate the cost of measures such as these, which we see in these estimates, but there will be a cost to society more broadly if all those businesses fold, charities cease to exist, and ordinary people in their homes cannot afford to put on the heating, turn on the lights and use the power on which they depend.

Thought must be given to customers who are off the gas grid and rely on heating oil. It costs more than £1,000 to fill an oil tank, often with a £500 minimum order requirement. The UK Government’s £100 of support is nowhere near adequate. Families cannot afford this. In Scotland nearly 130,000 homes rely on alternative fuels such as oil for heating their homes, and they need to know what will be coming later in the year and have certainty so that they can fill up their tanks. People are putting things on credit cards and getting into more and more debt, because they cannot afford this. There must also be some further indication about how vulnerable non-domestic customers will be identified. Again, there is little clarity on that from the UK Government. I hope there will be more, but there is not as things stand.

The eye-watering sums of money that we are talking about sound far away from people who just need an extra couple of hundred pounds to fill up a fuel tank or pay their bills. We should not, however, forget about the very real impact on businesses, charities and individuals of these huge sums of money, and of the money that we will be paying back for years because of the shambolic way the UK Government dealt with this issue. People have not voted for the chaos that there will be for many years to come or the prospect of further austerity as a result of the UK Government’s poor choices, and should not be expected to pay for it. In particular, people in Scotland are facing a higher toll in many ways, due to the cost of fuel in rural areas and unfair grid charging in Scotland. Again, the UK Government have not done anything to deal with that, and they have not decoupled the price of gas from the price of renewables. These are not choices that Scotland has made. Scotland would make different choices if we were independent, and we would ensure that nobody in Scotland went to bed cold and hungry.

[The Minister for Climate (Graham Stuart)]

I thank all Members who have spoken in this wide-ranging debate. The hon. Member for Ealing North (James Murray) spoke for His Majesty’s Opposition, and I say to him that the decision on the timing of this provision was made by the Monetary Policy Committee as part of the Bank of England. My right hon. Friend the Member for Wokingham (John Redwood) made, as usual, the most perspicacious observations, not least about the importance of grappling with the high cost to the public purse of these interventions. As the Financial Secretary to the Treasury said, he was right to say that this very much depends on prices, and one hopes that we will see the costs coming in lower than in the estimate before the House.

The hon. Member for Glasgow Central (Alison Thewliss) talked about the impact of prices on businesses and other organisations in her constituency. She is right that these are significant prices. They are the result of global prices. She will be aware that the EU is in a similar position and is looking at how best to break the link between gas prices and electricity prices. She will doubtlessly support the elements of the Energy Prices Bill that look to decouple those prices and do everything they can to hold prices down.

The hon. Lady will also observe that the world-leading contracts for difference scheme brought in by the Government and now widely mimicked by others has provided the capital certainty to make renewables in this country investible, thus leading to the transformation of our offshore wind. Renewables have gone from, I think, a pitiful 6.8% of electricity provision when Labour left power in 2010 to more than 40% today. Contracts for difference, brought forward by the Government, have not only contributed to that, but right now we are seeing tens of millions of pounds being paid back into the pot because of their structure, thus reducing costs that businesses and consumers would otherwise see.

[Alison Thewliss]

I appreciate the points that the Minister is making about contracts for difference, but does he not agree that the grid charging regime penalises generators of offshore and onshore wind in Scotland, making it more expensive for them to generate electricity than a power station in the south-east of England?