UK Energy Costs

Ed Davey Excerpts

Thursday 8th September 2022 Commons Chamber

[The Prime Minister]

I am completely committed to net zero by 2050 and I will be saying more about how we will be achieving that later in this speech.

As well as dealing with the immediate situation we face, we are also dealing with the root causes.

[Ed Davey (Kingston and Surbiton) (LD)]

I welcome the Prime Minister to her place and hope she will work with Opposition parties in the national interest. Will she confirm that her announcement today will still see the energy bills of struggling families rising by another £500 next month and that this winter they will be paying energy bills that are twice those they paid last winter?

[The Prime Minister]

At the same time as introducing the energy price guarantee, we are also providing families with £400 and providing extra support to the vulnerable. Vulnerable families will be receiving that extra support.

I want to move on to why we are in the situation we are in now. The fact is that energy policy over the past decades has not focused enough on securing supply. [Interruption.] I do not know why the right hon. Member for Doncaster North (Edward Miliband) is laughing, as he is partly responsible for this. There is no better example than nuclear, where the UK has not built a single new nuclear reactor in 25 years. This is not just about supply; the regulatory structures have failed, exposing the problems of a price cap applied to the retail but not the wholesale market. All of that has left us vulnerable to volatile global markets and malign actors in an increasingly geopolitical world. That is why Putin is exploiting this situation by weaponising energy supplies as part of his illegal war on Ukraine.

--- Later in debate ---

[Ed Davey (Kingston and Surbiton) (LD)]

Following the earlier statement from Mr Speaker, I think our hearts, thoughts and prayers will be elsewhere, but I wanted to contribute to the debate and to agree with the right hon. Member for Forest of Dean (Mr Harper) and his questions on heating oil. That is a critical issue for people in rural communities, and we need answers immediately.

What the Prime Minister has announced is not a freeze on people’s energy bills. In the middle of a cost of living emergency, the Conservatives are choosing to put energy bills up by another £500 for struggling families. That hike in people’s energy bills comes on top of the £700 rise we saw last April. Struggling families will be paying twice as much for energy as they were last year, and people will still be desperately worried about how they will keep warm this winter. Last May’s £400 discount will simply not make up for the enormous rise in energy bills. So where is the new support for families and pensioners who are struggling? Under the Prime Minister’s plan, fuel poverty will get worse, not better.

I turn to how we think the Prime Minister is proposing to pay for the package. Why does it seem that the Government will be handing an eye-watering bill to taxpayers in the form of higher borrowing? We all know that that ultimately means higher taxes for taxpayers, and particularly for our children. That does not seem conservative, and it does not seem right. Why has she rejected the alternative of a windfall tax on today’s oil and gas giants, who are raking in enormous, unexpectedly high profits thanks to President Putin’s invasion of Ukraine? How is it fair to take money from future taxpayers—from our children—and hand it to today’s oil and gas barons? How is it responsible to borrow so much to pay for consumption when our economy is already in such a mess, with the pound falling so dangerously?

The fair and responsible energy policy would be to increase investment massively in the cheapest and most popular forms of energy available to us: wind and solar. I was absolutely shocked that the Prime Minister did not announce a massive, fast expansion of renewables to bring people’s energy bills down.

The Prime Minister has made some alarming choices today by rejecting cheap wind and solar power, raising energy bills even higher than they are now, refusing to give extra support to struggling families and pensioners, and paying for a policy with higher taxes on our children instead of a windfall tax on fossil fuels. Those are the wrong choices.