Non-domestic Energy Support

Drew Hendry Excerpts

Monday 9th January 2023 Commons Chamber

[James Cartlidge]

I do not agree about the level of support. I cannot speak for what is happening in Germany, but this remains significantly more generous support for the energy and trade-intensive industries. The hon. Gentleman is right about the figures for this country: the price threshold for the scheme is £99 per megawatt hour for gas and £185 per megawatt per hour for electricity. To be clear, about 60% of the up to £5.5 billion that we have allocated for this scheme would be for the energy and trade-intensive industries. That is more than half of all the funding. It is a significant commitment and includes major manufacturing sectors such as steel.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The Minister talks about financial prudence, but when any business goes out of business this Government lose the tax from pay-as-you-earn and all the other income from them. His own Government have described the hospitality sector as a vulnerable industry. We have heard in the Chamber today that increases of 400% and 500% are common. Energy costs of £5,000 to £15,000 a month are not uncommon. Does he think that a maximum of £191 per month will make them feel any less vulnerable?

[James Cartlidge]

We do see the importance of the hospitality sector in every part of the United Kingdom. That is precisely why we have the current six-month scheme—£18 billion. Let us be clear about something: if a Government wanted to raise £18 billion year on year, that would require an increase in the basic rate of income tax of 3p. That is enormous and puts into context the scale of that cost.

Yes, we want to support hospitality. To give one example, because of freezes or cuts to the duty on whisky and spirits, that duty is now at the lowest level in real terms since 1918. Alongside that, next August, for the first time ever in this country—something not possible when we were a member of the EU—we will have a differential duty with a lower rate on a pint in a pub compared with a can of the same beer in a supermarket. We are supporting hospitality but we are balancing that against the need to run a tight fiscal ship.