Cost of Energy

Graham Leadbitter Excerpts

Tuesday 11th February 2025 Westminster Hall

[Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)]

It is a pleasure to serve under your chairship, Mr Western. I congratulate the hon. Member for Bath (Wera Hobhouse) on securing this morning’s debate. I will not speak for too long, because we have had several debates on this issue; instead, I will focus on the key points that I think need hammering home.

For several years colleagues in the highlands and islands, and now my hon. Friend the Member for Argyll, Bute and South Lochaber (Brendan O'Hara) and I, have worked on the highland energy rebate campaign., which would mean a geographic rebate for people in the highlands and islands affected by higher fuel prices. I am not precious about the mechanism for that. There is a bit of kickback about a geographic mechanism, but it is a very useful debating tool because it hammers home the fact that there is a geographic discrepancy and discrimination for people living in the highlands and islands, and the north of Scotland more generally.

We need a solution from the Government, and we need it urgently. For decades, people in the highlands and islands have been paying more for their energy than those in almost any other part of the UK. They pay more for distribution, and no other part of the UK pays more for transmission. All that people see are wires and pylons. The energy infrastructure, much of it in the highlands and islands, is used to send energy hundreds of miles away, but that is not distributed across bills in the same way as the distribution charges are. For example, in the flat that I live in when I am down here in this place, I pay roughly 40p on standing charges, and at home I pay 60p-plus on standing charges. That is a third extra every single day on that standing charge, and that is the same for people across the whole of the highlands and islands, which puts it in perspective for folk.

For decades, successive Governments have failed to tackle poor regulation. Ofgem has shown little interest in dealing with energy prices in the north of Scotland. Twenty years ago, we were less focused on decarbonisation issues than we are now. We were trying to get people on grid because there were so many people off-grid in the highlands and islands. The authorities would not look at getting gas into more remote areas; that was very low on the priority list. I am not advocating that we should do that now; new technologies have come in since then and we need to focus on decarbonising our energy systems. But it evidences that this has been going on for a long time, and that solutions have not been found.

Governments have always focused on urban areas with big populations to the detriment of rural customers. That is not acceptable, because the highlands and islands of Scotland are the coldest parts of the UK and have the highest levels of fuel poverty per head of population. That major issue needs to be addressed.

I want to highlight a couple of strategic issues about generators. We have wind farms consented to produce many gigawatts, but they are not able to progress because the Ministry of Defence has not come up with a radar solution that will allow them to operate. That is a matter of urgency. It is about capacity within the MOD and the amount of effort that it has been able to put into coming up with a solution; it is not because there is no solution, but because not enough people are working on it.

As a consequence, we have big projects that would generate employment through their construction and would contribute to our net zero goals, but they cannot get over that hurdle, despite being consented and having passed all the other barriers. If they cannot get over that hurdle, those consents will fall and the projects will be lost. That needs to be urgently addressed, and I urge the Minister to do what he can to work with colleagues in the MOD to get some focus on that.

I welcome the work on social tariffs, on which the SNP has a manifesto commitment, and I know from colleagues in the Scottish Government that a lot of close working is going on with the Department, which I welcome. Hopefully we will see a positive resolution to that in the not-too-distant future.

Finally, it would be remiss of me not to mention the winter fuel payment. The £300 winter fuel payment has been lost to tens of thousands of people across the highlands and islands. That combines with the points I have already made—along with the cost of energy going up since the Government came in last July and the promise to reduce energy bills by £300 for the most vulnerable pensioners—so we are now looking for £780. I am not entirely sure how that £780 reduction in bills will be achieved, but that is essentially the position that the Government find themselves in—they need to find that for thousands of people in order to maintain that manifesto pledge, and it will be interesting to know how that is going to happen.

--- Later in debate ---

[Michael Shanks]

I was not expecting the hon. Gentleman to stop at that point. I saw him in his place earlier and knew that I would talk about community benefits. I will turn now to the points about community energy and community benefits; both are important.

On community benefits, in all of this, we want to bring communities with us on this journey. That is important. We have made a very clear case that this Government intend to build the energy infrastructure we need, the transmission infrastructure we need, the homes that people need and the industry that people need to grow our economy, which is important. For far too long, this country has not built the infrastructure it needs. In doing so, we want to streamline the planning process so that applications are dealt with far more efficiently and far faster, but we want to bring communities with us. That is absolutely vital.

We will be saying much more very soon about community benefits on several fronts. The first will be how we expand some of the community benefits for particular technologies. That process is already well established in Scotland, for example with onshore wind. The absurd policy of the onshore wind ban in England means that it has not developed as much, but we can look to Wales and to Scotland for advice on that. We also want to expand that to other technologies, particularly solar, which does not have the same community benefits at the moment, and to network infrastructure. I have always said that, if we build network infrastructure and a community is hosting that infrastructure that is essential for the country, it is doing a favour for the rest of the country and should feel some benefit from it. We will announce a package of community benefits shortly.

On the wider point about community infrastructure, we do not only want communities to benefit—we want them to actually own the infrastructure that gives social and economic benefits as well.

[Graham Leadbitter]

Will the Minister give way?

[Michael Shanks]

I will not, because I am going to come to the point made by the hon. Member. He has made the point about a highland pricing formula in the past—he is very reasonable about the issue—and it is something we will look at. The reform to the energy market will be part of that work as well. I am afraid I do not have time to come to much detail on mitigations on radar, apart from saying that we recognise the problem and we are working on it.

As always, this has been an incredibly useful debate. The passion from hon. Members is important, because this is one of the most important challenges facing our communities. We are committed to ensuring that energy is affordable for households across the country. Our clean power mission will help us deliver on that, but we have much more to do and we recognise that fact. We will work with Members from all parties, with industry and consumer groups, with charities and with individual constituents who raise these issues to make sure that we support everyone with this transition, to bring down bills in the long term and to support families with their energy costs.