Energy Support for Farms

Andrew Bowie Excerpts

Tuesday 21st March 2023 Westminster Hall

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

It is an absolute pleasure to serve under your chairmanship, Mr Robertson. I thank all hon. Members for joining us in Westminster Hall for this debate. All of us—especially those of us who represent rural constituencies—are aware of the challenges that farmers are facing at the minute. I wish to express my gratitude to the hon. Member for Upper Bann (Carla Lockhart) for bringing forward this debate and for her dedicated campaign to back British farming.

The Government have implemented several comprehensive support schemes across the UK to assist farmers in coping with energy costs. In particular, I wish to address the support being provided in Northern Ireland, given the vital contribution of farming and agriculture to the economy there.

I understand how fundamental agriculture and the wider agrifood industry is to Northern Ireland, employing more than 50,000 people across 26,000 farms. Northern Ireland is renowned at home for the quality of its produce. Farms are at the heart of the agrifood industry, which contributes £4.5 billion in turnover every year, helping to deliver a stronger, more secure economy in Northern Ireland. Before I go any further, let me say that I would be delighted to take the hon. Lady up on her invitation to visit Upper Bann and see farms operating in her constituency.

Given the industry’s importance, it is right that the Government’s energy schemes have offered much-needed support to farmers over the winter in the face of high and rising energy costs. On 1 October, we introduced the energy bill relief scheme, which will continue to run until the end of this month. It provides a discount on the wholesale component of gas and electricity bills and has provided protection to farmers from excessively high energy costs over the winter period. Support offered by this package is worth £7.3 billion and it is available across the entire United Kingdom.

Although energy prices are coming down, and it is right that we balance continued support with energy costs with our duty to the taxpayer, we also recognise that prices remain far above historical levels. For that reason, although the energy bill relief scheme is coming to an end, we have pledged to provide further support to non-domestic customers, including our farming industry, from April onwards through the energy bills discount scheme. The EBDS will continue to provide support to eligible non-domestic customers with their energy bills from April this year until the end of March 2024.

It is true that the EBDS baseline support is significantly reduced compared with that of the current energy bill relief scheme. That is to reflect the welcome reduction in wholesale energy prices. The Government make no apology for ensuring that the taxpayer is protected; we need to focus our support where it is most needed. Under the support package, energy and trade-intensive industries will receive a higher level of support than the baseline element. That is essential if those industries are to maintain their competitive edge against their international counterparts as they are less able to pass on increased costs to their consumers.

Before I move on, I wish to address the specific points that were raised. It is a great pleasure to see the hon. Member for Strangford (Jim Shannon) back in the Chamber for the second time today. I am delighted to address his points, although I take issue with his assertion that the Comber spud is the greatest potato in the world. I think a tattie howked from the Howe o’ the Mearns is the far superior potato when it comes to international comparisons. None the less, I do take on board all of what he said. I know that, as a diligent Member of Parliament for an incredibly rural constituency, like me, he speaks from his heart when he talks about representing his farming constituents. I associate myself entirely with his comments on the socially isolated nature of farming in the 21st century. We must do all that we can to support farmers in the incredibly important work that they do to support this country and, indeed, to export great British produce around the world.

The shadow Minister, the hon. Member for Southampton, Test (Dr Whitehead), raised eminently sensible and pertinent points. I commit to looking at the definition of an energy-intensive industry, and specifically at his point about how the less carbon-intensive elements of farming may reduce the overall burden of carbon intensity.

Let me turn to the hon. Member for North Ayrshire and Arran (Patricia Gibson), the spokesperson for the Scottish National party. I will not take any lectures from the SNP on supporting Scottish farmers. It is not the Conservative Government, but the SNP Government who have been accused by the National Farmers Union Scotland of leaving farmers to operate in an information void, given the lack of progress on the Scottish post-Brexit farming Bill.

If the hon. Lady really is as passionate as she says she is about supporting domestic food production in Scotland, perhaps she will make the case within the SNP Government that they should get on board and extend the Genetic Technology (Precision Breeding) Bill to Scotland, just as the NFUS has asked them to. That could be a great fillip and a great boost for Scottish farming, given that so much of the technology in that field is being developed in Scotland. Other than that, the hon. Lady did make some important points regarding supporting Scottish farmers, which, of course, I take on board.

I thank the hon. Member for Upper Bann for raising the issue of farms not being eligible for the additional targeted support of the energy and trade-intensive industries scheme. I am aware that the National Farmers Union and the Ulster Farmers Union have raised similar concerns. I want to stress that the energy and trade-intensive industries eligible sectors list is targeted and comprehensive. It was developed to support sectors in the top 20th percentile for energy intensity and the top 40th percentile for trade intensity in the UK, notwithstanding what I said in reply to the hon. Member for Southampton, Test about the carbon intensity of some elements of farming.

Sadly, the farming sector does not meet the ETII eligibility criteria at the minute and is therefore not eligible to receive the targeted support. Although I recognise that the hon. Member for Upper Bann would wish us to go further, I hope she will understand that we have sought to be fair in applying the criteria rigorously and objectively. We do not have plans to extend the scope of eligible sectors to include farms, as confirmed by the Chancellor at the Budget. However, the non-domestic alternative fuel payment offers one-time support of £150 to approximately 76,000 customers in Northern Ireland and 315,000 non-domestic customers without access to mains gas, including some farms, throughout Great Britain. High users of heating oil can apply for a top-up payment based on their usage over the past year.

It is essential that we look at energy bills support for farms and farmers in the round. Although farms will benefit from the EBDS at its base support level, rather than at the enhanced level for energy and trade-intensive industries, they will also benefit from funding available to domestic customers. That includes the energy price guarantee, the alternative fuel payment and the energy bills support scheme. The energy price guarantee reduces electricity and gas costs for domestic customers, aiming to lower annual bills, combat fuel poverty and maintain supplier market stability. The scheme covers approximately 29 million households.

In Northern Ireland, all households are receiving a combined payment of £400 from the energy bills support scheme and a £200 alternative fuel payment, regardless of whether they use alternative fuels or mains gas to heat their homes. That payment has been provided by electricity suppliers to all households with a domestic meter and a contract. That will include farmhouses with a domestic meter. Farms in Northern Ireland with a combined meter are covered by the alternative funding, to which I will turn shortly. Suppliers began making payments on 16 January and have confirmed that all first attempts to reach all customers have been made. Efforts are now ongoing to reach those who encountered challenges in the first pass, such as vouchers addressed to the wrong individual or failed bank transfers. Those who have not yet received their vouchers or a payment into their bank account should immediately contact their electricity supplier.

In Great Britain, the energy bills support scheme is being delivered as a discount on energy bills and provided by suppliers in monthly instalments from October 2022 to March 2023. As we are now approaching the end of the scheme’s final month, I urge all hon. Members to join the Government in highlighting to their constituents who use traditional prepayment meters the importance of acting now to redeem their energy bills support scheme vouchers.

[Jim Shannon]

Over the weekend, it was indicated in a newspaper that 20,000 households in Northern Ireland have not received their benefit. Is there any way that the Minister can ascertain who those 20,000 households are? Are some of them farmers? We suspect that they are. There was certainly an issue early on, with some farmhouses not receiving the benefit. Would the Minister be so generous as to find out the answer to that question?

[Andrew Bowie]

Across the entire United Kingdom, 1.9 million vouchers remain unused, which is why I ask all hon. Members to encourage people who have not received their vouchers, or who are not receiving the discount that they should be, to contact their electricity supplier, either directly or through their Member of Parliament. I will find out the fuller answer to the hon. Gentleman’s specific question on where those people are.

For those without a domestic energy supply, who were not eligible for automatic support, we have introduced the energy bills support scheme alternative funding in Great Britain and its Northern Ireland counterpart, the energy bills support scheme alternative funding for Northern Ireland. They offer one-off, non-repayable payments of £400 and £600 respectively. In Northern Ireland, applications are processed by our contracted delivery partner, with Government support. The £600 payment in Northern Ireland comprises £400 for energy bills, as in Great Britain, and £200 for alternative fuels, mirroring the payments under the main energy bills support scheme in Northern Ireland.

The Government are committed to providing assistance to farmers, households and businesses affected by high energy costs. The comprehensive schemes that I have outlined have been designed to offer support when it is most needed and alleviate the burden on our citizens and businesses during these challenging times.

I congratulate the hon. Member for Upper Bann on securing this debate on a subject of great importance to many farms, businesses and households. I commit to taking away all that she and others have raised about the high intensity of those businesses. I would be delighted not just to visit her constituency but to work further with her if my Department can provide further assistance to ensure that support reaches all those who need it as swiftly as possible.