Energy Prices Bill

Graham Stuart Excerpts

Committee stage
Monday 17th October 2022 Commons Chamber

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

With this it will be convenient to discuss the following:

Amendment 10, in clause 2, page 3, line 5, leave out “negative” and insert “affirmative”.

Clause 2 stand part.

Amendment 11, in clause 3, page 4, line 7, leave out “negative” and insert “affirmative”.

Clauses 3 to 8 stand part.

Amendment 19, in clause 9, page 8, line 3, at end insert—

‘(2A) Within two weeks of this Act coming into force the Secretary of State must make a statement to Parliament as to whether he intends to introduce regulations under subsections (1) or (2), and including any indicative reductions that will be implemented.”

This amendment would require the Government to state within two weeks of Royal Assent whether it will introduce regulations under clause 9.

Amendment 7, in clause 9, page 8, line 16, at end insert—

‘(4A) Regulations under this section must apply to non-domestic customers—

(a) that signed a fixed agreement with their energy provider after 1 December 2021, and

(b) on variable rates tariffs.”

This amendment would ensure that non-domestic customers who signed a fixed tariff agreement between 1 December 2021 and 1 April 2022 also benefit from the reduced energy charges.

Amendment 17, in clause 9, page 8, line 17, leave out “may” and insert “must”.

Amendment 18, in clause 9, page 8, line 18, after “section” insert “, and provide a report to Parliament setting out the amount of money paid to electricity and gas suppliers over the 6 month period, an estimate of how many businesses have been supported, and a business sectorial breakdown of the financial support provided.”

This amendment is to enable analysis of the cost of the scheme, the types of businesses supported, and the approximate sums paid to different business sectors.

Clauses 9 to 12 stand part.

Amendment 16, in clause 13, page 10, line 26, at end insert—

‘(1A) The Secretary of State may establish a domestic fuel reduction scheme in Great Britain for off gas grid homes heated from supplies of fossil fuels such as LPG and oil.”.

Amendment 6, in clause 13, page 10, line 37, at end insert—

‘(3A) The Secretary of State must make alternative fuel payments to non-domestic consumers of energy who are not connected to the gas or electricity grid and who will not benefit from the non-domestic energy bill relief schemes, and these payments must be at a level which provides such consumers with a cost reduction equivalent to those consumers benefiting from the non-domestic energy bill relief schemes.”.

This amendment would provide non-domestic customers that are off grid and who are not covered by the Energy Bill Relief Scheme with support which has parity with that given to other non-domestic users.

Amendment 9, in clause 13, page 10, line 37, at end insert—

‘(3A) Any payments made to energy users not connected to the gas or electricity networks must be provided direct to those users’ bank accounts.”.

This amendment would ensure that those receiving payments under the Alternative Fuel Payments schemes do so through their bank accounts rather than through their electricity bill.

Clause 13 stand part.

Amendment 12, in clause 14, page 11, line 24, leave out “as soon as reasonably practicable” and insert “within 28 days of the expenditure being incurred”.

Amendment 13, in clause 14, page 11, line 25, at end insert “; and in calculating the period of 28 days, no account is to be taken of any whole days that fall within a period during which—

(a) Parliament is dissolved or prorogued, or

(b) either House of Parliament is adjourned for more than four days.”.

Clauses 14 and 15 stand part.

Amendment 14, in clause 16, page 14, line 40, leave out “The first”.

Amendment 15, in clause 16, page 14, line 41, leave out “any other regulations under this section are subject to the negative procedure”.

Clause 16 stand part.

Amendment 8, in clause 17, page 15, line 24, at end insert—

‘(2A) The Secretary of State must place any information received in response to a direction under subsection (1) in the Library of the House of Commons.”.

This amendment would require the Secretary of State to place in the Commons Library the responses to any direction to an electricity generator to provide information under the power in clause 17(1).

Clauses 17 and 18 stand part.

Amendment 4, in clause 19, page 16, line 37, at end insert—

‘(1A) Regulations under subsection (1) must provide that the pass-through requirements on intermediaries are in force until at least 30 September 2024.”.

This amendment would ensure that the requirement on intermediaries to pass through to end users the benefit of Government price support will last for two years.

Clauses 19 to 26 stand part.

Amendment 1, in clause 27, page 22, line 40, at end insert—

“(c) anything done or proposed to be done to prevent electricity generators and oil and gas producers from passing on the costs of any levy imposed on them or payments they are required to make under this Act.”.

This amendment is a power for the Secretary of State to undertake consequential actions in order to secure the full reduction in the cost of domestic or non-domestic energy bills in Great Britain.

Clauses 27 to 30 stand part.

New clause 1—Impact assessment on VAT zero rating insulation works for tenement buildings in Scotland—

‘Within six months of the date of Royal Assent to this Act, the Secretary of State must carry out an assessment of the impact of zero rating value added tax on work and materials to insulate tenement buildings in Scotland.’.

New clause 2—Marginal cost of electricity—

‘Within two years of the date of Royal Assent to this Act, the Secretary of State must consult on and implement a scheme to disaggregate the cost of production of natural gas from the cost of production of other energy sources with a view to reducing the cost of electricity to domestic and commercial consumers.’.

This new clause requires the Secretary of State to devise and implement a scheme to disaggregate the cost of production of natural gas from the cost of production of other energy sources in order to reduce the cost of electricity to domestic and commercial consumers.

New clause 3—Report on additional expenditure treated as incurred for purposes of section 1 of the Energy (Oil and Gas) Profits Levy Act 2022—

‘(1) The Secretary of State must, within six months of the date of Royal Assent to this Act, publish and lay before Parliament a report on the effect of reducing the amount of the allowance under section 2(3) of the Energy (Oil and Gas) Profits Levy Act from 80% to 5%.

(2) The Report must set out projections of the effect of the reduction set out in subsection (1) on domestic and non-domestic energy bills.’

This new clause requires the Secretary of State to produce a report assessing the impact of reducing the investment allowance for oil and gas companies as set out in the Energy (Oil and Gas) Profits Levy Act from 80% to 5%, and in particular to assess such a reduction’s impact on domestic and non-domestic bills.

New clause 4—Energy cost support for users of heat networks—

‘(1) The Secretary of State must make energy cost support payments to users of heat networks who will not benefit from the Energy Price Guarantee.

(2) These payments must be at a level which provides such users with a cost reduction equivalent to that received by those benefiting from the Energy Price Guarantee.

(3) These payments must apply from 1st October 2022 and run for two years.’

This new clause would ensure that users of heat networks will receive energy cost support for two years.

New clause 5—Report on support for business after six months—

‘Within one week of the date of Royal Assent to this Act, the Secretary of State must lay before Parliament a statement about the support that will be offered to non-domestic customers in Great Britain and Northern Ireland when the initial six-month period of support has ended.’

This new clause would require the Government to produce a report on support for business after the initial six months one week after the Bill receives Royal Assent.

New clause 6—Impact assessment of a housing decarbonisation scheme—

‘(1) Within six months of the date of Royal Assent to this Act, the Secretary of State must work with the devolved authorities to carry out an assessment of the potential impact of a housing decarbonisation scheme.

(2) The assessment must set out the different impacts of reaching the following Energy Performance Certificate (EPC) ratings—

(a) all domestic properties in the UK to EPC rating “A” by 2030;

(b) all domestic properties in the UK to EPC rating “B” by 2030;

(c) all domestic properties in the UK to EPC rating “C” by 2030.

(3) The assessment must consider the impact of a housing decarbonisation scheme under the different scenarios outlined in subsection (2) on—

(a) average domestic energy bills for households across the Wales, England, Scotland and Northern Ireland;

(b) the number of households living in fuel poverty in Wales, England, Scotland and Northern Ireland;

(c) the Welsh Government’s climate targets;

(d) the UK Government’s climate targets;

(e) the Scottish Government’s Climate Targets;

(f) the Northern Ireland Executive’s Climate Targets.

(4) The impact assessment must be co-authored by—

(a) the UK Government;

(b) the Welsh Government;

(c) the Scottish Government;

(d) the Northern Ireland Executive.

(5) A report on the findings of the impact assessment must be laid before Parliament within three months of its publication.

(6) The Secretary of State must make an oral statement to the House of Commons when any report under subsection (4) is laid.’

This new clause would require the Government to work with the devolved authorities to assess the impact of a UK-wide housing decarbonisation scheme.

New clause 7—Impact assessment of setting the Domestic Energy Price Reduction Scheme at the pre-April Ofgem cap levels—

‘(1) Within one month of the date of Royal Assent to this Act, the Secretary of State must carry out an assessment of the potential impact of using the Domestic Energy Price Reduction Scheme to set domestic energy bills for Scotland, Wales and England at the following levels—

(a) £1,277 for standard-variable tariffs;

(b) £1,309 for pre-payment meters.

(2) The Impact assessment must consider the impact of the policy set out in subsection (1) on—

(a) the number of households living in fuel poverty in Scotland, Wales and England;

(b) the number of children living in relative income poverty in Scotland, Wales and England;

(c) the number of children living in absolute income poverty in Scotland, Wales and England.’

This new clause would require the UK Government to assess the impact of using the price reduction scheme to set energy prices at the pre-April Ofgem cap levels.

New clause 8—Review of forecast and outturn revenue and profits of electricity generators and UK oil and gas producers—

‘(1) The Secretary of State shall, within one month of the passing of this Bill and every six months thereafter, publish an assessment of forecast and outturn revenue and profits of electricity generators and oil and gas producers.

(2) This review must cover all electricity generators as specified in section 16(10) of this Act and all companies carrying on a ringfenced trade as defined in Clause 1 of the Energy (Oil and Gas) Profits Levy Act 2022.

(3) This review must consider total revenue and profits from UK production and generation that are forecast in each financial year from 2022/23 until 2025/26, as well as outturn revenue and profits in these years when data becomes available.”

This new clause would require the Government to assess the revenue and profits of electricity generators and oil and gas producers every six months until 2025/26.

New clause 9—Removing regional variation from standing charges—

‘The Secretary of State must make provision to ensure that electricity standing charges are uniform throughout the country, including England, Northern Ireland, Scotland and Wales.’

This new clause would end regional variations of electricity standing charges.

New clause 10—Establishment of a domestic home heating oil voucher scheme for households in Northern Ireland—

‘(1) The Secretary of State must establish a domestic home heating oil voucher scheme for households in Northern Ireland.

(2) A “domestic home heating oil scheme for Northern Ireland” is a scheme that makes provision for making voucher payments to households in Northern Ireland to provide either 1000 litres of home heating oil, or a quantity that is substantially consistent with the support offered to domestic gas customers.’

New clause 11—Energy Profits Levy—

‘(1) The Secretary of State must lay before the House an assessment of the additional revenue that would result from the following policy measures—

(a) amending the Energy (Oil and Gas) Profits Levy so that it applies to oil and gas profits incurred since 1st October 2021,

(b) removing from the Energy (Oil and Gas) Profits Levy allowances for investment in oil and gas extraction,

(c) increasing the rate of the Energy (Oil and Gas) Profits Levy beyond its current level of 25%, and

(d) implementing a windfall tax on the excess profits of coal and gas-fired power stations.

(2) In addition the Secretary of State must lay before the House an official estimate of the oil and gas super profits over the next two years.

(3) The Secretary of State must lay the report no later than 31st October 2022.’

This new clause would require the Secretary of State to lay a report before the House detailing the impact of expanding the government’s Energy (Oil and Gas) Profits Levy.

New clause 12—Energy cost support for off-grid consumers—

‘(1) The Secretary of State must make energy cost support payments to users who are not connected to either the gas or electricity grid and who will not benefit from either the Energy Price Guarantee or Energy Bill Relief Scheme.

(2) These payments must be at a level which provides such users with a cost reduction equivalent to those benefiting from the Energy Price Guarantee.

(3) These payments must apply from 1st October 2022 and run for two years.’

This new clause would ensure those off-grid will receive energy cost support for two years.

New clause 13—Report into effectiveness of energy efficiency programmes in reducing energy costs—

‘(1) The Government must review the impact of energy efficiency programmes in reducing energy costs in accordance with this section and lay a report of that review before the House of Commons within 6 months of the passing of this Act.

(2) A review under this section must consider the impact of—

(a) the number of homes and business properties which have increased their EPC rating,

(b) the number of homes and business properties which have undergone retrofitting programmes, including—

(i) solar panels, and

(ii) replacement of gas boilers,

(c) increases in renewable energy sources, and

(d) public messaging campaigns in changing energy usage habits.’

This new clause would require the Secretary of State to report on the impact of energy efficiency programmes in reducing energy costs.

New clause 14—Fuel poverty impact analyses of provisions of this Act—

‘(1) The Chancellor of the Exchequer must lay before the House by 31st January 2023 a report assessing the impact of this Act on fuel poverty, taking into account the following two scenarios—

(a) the energy price cap being set at its current level of £2,500, and

(b) the energy price cap being set at £1,971.

(2) A review under this section must consider the impact of the provisions of the Act on—

(a) households at different levels of income,

(b) households in receipt of the Alternative Fuel Payment (that is, not connected to either gas or electricity grid),

(c) households who use heat networks, and

(d) households in rural communities.

(3) A review under this section must include a separate analysis of each separate measure in the Act, and must also consider the cumulative impact of the Act as a whole.’

This new clause would require the Secretary of State to report on the impact of the provisions of the Act on the level of fuel poverty.

New clause 15—Report into the impact of provisions in the Act on the long term viability of the green energy industry—

‘(1) The Government must review the impact of provisions in the Act on the long term viability of the green energy industry.

(2) A review under this section must consider the impact of the Act on—

(a) the likelihood of achieving net zero by 2050, and

(b) creating allowances for investment in green energy.’

This new clause would require the Secretary of State to report on the long term viability of the green energy industry.

New clause 16—Investment in renewables—

‘In exercising the powers under this Act the Secretary of State must seek to ensure that they do not disincentivise investment in renewables.’

This new clause would require the Government not to disincentivise investment in renewables when exercising the powers under this Act.

New clause 17—Calculation of energy and gas prices—

‘The Secretary of State must publish details of how the Government has determined the relative levels of the gas and electricity price reductions brought into effect under the provisions of this Act.’

This new clause would require the Government to explain how it has arrived at the electricity and gas price reductions under the Act.

Manuscript new clause 18— Energy support after April 2023—

‘(1) The Government must lay a report before the House of Commons within 28 days of Royal Assent stating what energy price support it will provide from April 2023 onwards.

(2) The report must also contain—

(a) an estimate of what average domestic energy bills are expected to be in April 2023 if no further support provided;

(b) an estimate of how many households will be classed as being in (a) fuel poverty and (b) extreme fuel poverty if no further support is provided;

(c) what the extension of the universal support scheme for a further—

(i) 6 months;

(ii) 12 months and

(iii) 18 months is estimated to cost; and

(d) what alternative support schemes the Government will introduce to prevent any further increases in fuel poverty and protect the most vulnerable including—

(i) pensioner households,

(ii) those with disabilities and

(iii) those in receipt of benefits.’

This new clause would require the Government to make a report to the House setting out the energy support it will provide from April 2023 onwards.

That schedule 1 be the First schedule to the Bill.

That schedule 2 be the Second schedule to the Bill.

That schedule 3 be the Third schedule to the Bill.

That schedule 4 be the Fourth schedule to the Bill.

That schedule 5 be the Fifth schedule to the Bill.

Amendment 2, in schedule 6, page 36, line 17, after ”may” insert

‘provide for the reduction of the amount charged for domestic electricity supply from 8 September 2022 but’.

This amendment allows the domestic electricity price reduction scheme to begin from 8September 2022.

Amendment 3, in schedule 6, page 36, line 25, after ”may” insert

‘provide for the reduction of the amount charged for domestic electricity supply from 8 September 2022 but’.

This amendment allows the domestic electricity price reduction scheme to begin from 8 September 2022.

Amendment 5, in schedule 6, page 37, line 22, leave out sub-paragraphs (1) to (4) and insert—

‘5 (1) Regulations under section 9(1) and 9(2) must provide for the reduction of charges for electricity supply and for gas supply to last for a period of two years beginning with the operative date.’.

This amendment would require the support for non-domestic electricity and gas users in Great Britain to continue for two years.

Amendment 20, in schedule 6, page 39, line 6, leave out “three years and six months” and insert “two years”.

That schedule 6 be the Sixth schedule to the Bill.

That schedule 7 be the Seventh schedule to the Bill.

[The Minister for Climate (Graham Stuart)]

We are facing a global energy crisis, which has been exacerbated by Russia’s illegal invasion of Ukraine. This Bill puts support to help people, businesses, charities and the public sector across the UK with their energy bills on a secure legislative footing. It is a vital step in delivering the necessary package of assistance for the whole of the UK. We are putting the Bill through in an expedited way, and I thank His Majesty’s Opposition and other parties for their constructive engagement with us ahead of today. It is important that I put on record what the Bill will do, but I will seek to be brief because a number of Members are keen to speak to their amendments.

Clause1, together with clauses 2 to 8, provides for the establishment in legislation of the energy price guarantee schemes in Great Britain and Northern Ireland for electricity and gas. The EPG represents significant and bold action that will help to protect families from the spiralling cost of energy. This clause provides for the establishment of the EPG schemes and for them to be amended and revoked. For example, the schemes could be amended to change the eligible tariffs or the amount of financial support provided. The GB scheme has been operational from 1 October and delivered through contracts between the Secretary of State and energy suppliers. The Bill will put the scheme on a more secure statutory footing. The House will be aware that the Chancellor’s statement intends to refine the scheme after six months.

Clauses 9 to 12 will introduce a scheme that enables the Government to reduce the charges for electricity and gas supplied by licensed electricity suppliers to eligible non-domestic customers in Great Britain and Northern Ireland. This scheme represents significant and bold action to protect all eligible non-domestic customers, including businesses, charities and the public sector, such as hospitals and schools, from excessively high energy bills over the winter period. Without this intervention, the wider negative effects of this economic pressure would be severe and would materialise very quickly.

[Jonathan Edwards]

What advice would the Minister give to manufacturing companies in my constituency that have order books that extend past the six-month period, which the Bill supports, on pricing their products, given that they will have no idea what the cost of production will be following the increase in energy prices?

[Graham Stuart]

The hon. Gentleman’s question goes to the heart of the matter, which is that, if it were not for this intervention, those businesses would have been facing very high costs. We are committed to a review after three months, which will look at those who are least able to alter their energy use and come forward with proposals to help them in due course. That is why this is so important, but because of the costs and the impact, it needs to be time limited.

Clauses 13 to 15 will introduce powers for the Secretary of State to allow the Government to take steps, including the giving of financial assistance, to respond to the energy crisis, and to designate other bodies to take action in support of such steps. The power to give financial support is a time-limited power, at three years and six months. This is essential for the delivery of the various energy price support schemes and the administrative tying-up of them at the end part.

Clauses 16 to 18 allow the Government to break the link between high gas prices and cheap low-carbon electricity. These measures will allow the Government to take decisive action, through subsequent regulations, for a payment administrator to obtain excessive revenues from low-carbon electricity generators. This temporary measure will help more fairly to reflect the cheap costs of low-carbon generation. Clause 18, which extends the contracts for difference scheme to existing low-carbon electricity generators, will grant such generators longer-term revenue certainty.

[Alan Brown]

I apologise if I missed it, but did the Minister explain clauses 13 and 14? How does he see clause 13 working in terms of giving the Secretary of State the power to spend up to £100 million on various schemes at any one time without a resolution in the House? What kind of measures does he envisage the Secretary of State entering into with such a power?

[Graham Stuart]

As the hon. Gentleman knows, this legislation lays out the remit of the Secretary of State, under the powers within the Bill, to intervene to protect businesses and consumers. That is its central aim.

Clause 19 ensures that the support schemes I have mentioned reach their intended beneficiaries. The requirement to pass on energy price support will help to ensure that tenants and other end users receive the support they need. Clause 20 will make amendments to the existing price cap legislation to support the delivery of the energy price guarantee. The clause will ensure that Ofgem continues to calculate the cap level to determine what it costs an efficient energy supplier to provide a household with gas and/or electricity. In response to the points made by the right hon. Member for Doncaster North (Edward Miliband), this will not determine the prices that households pay, but it will enable the Government to identify what level of support is needed to deliver the prices in the energy price guarantee. So it has a different purpose, but a useful one, in delivering the EPG. Finally, clauses 21 to 23 provide the power to enable the Secretary of State to modify energy licence conditions urgently, as necessary, and give directions to support the response to the energy crisis.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

I am sorry that we have such truncated time to discuss this legislation this evening, because while we have a substantial level of support for the Bill, we have our concerns about sections of it and there are parts of it that should not be in it at all. I did not have the opportunity to commend the excellent speeches on Second Reading by a number of my hon. Friends, who put into context the issues surrounding the Bill very well. I will not go over them again. I want instead to concentrate on what is in the Bill and what it will do to move towards the point that we all want to get to, which is to see the support mechanism for domestic and non-domestic customers placed into legislation and supported as well as it can be.

One of the many things that have occurred by way of recent significant U-turns is the fact that the energy price support scheme is now going to last not for two years but for six months. I appreciate that there are, shall we say, warm words behind that, and measures will subsequently be sought to concentrate help for people, but we need to be clear that this Bill is written as if the previous scheme were still in place. Various parts of the Bill, including substantial elements of schedule 6, talk about a two-year programme, after which, by way of a sunset clause, charges should not be raised on energy generators specified in clause 16.

I do not expect the Minister to make immediate manuscript amendments reflecting the change that has taken place between this morning and this afternoon, but he should reflect on the effect it will have on the Bill and whether, by way of a statement to this House or through subsequent changes in secondary legislation, he will introduce into this Bill a more accurate reflection of where we are now. I would be interested to hear from him on that in due course.

The Bill effectively has three parts. Clauses 1 to 8 essentially establish the energy bill relief scheme in legislation, which is just as well because the energy bill relief scheme has so far been effectively voluntary. It is important that we put the scheme into legislation so that it works properly. Not only do the Opposition have no quarrel with that, but we strongly support it.

As my right hon. Friend the Member for Doncaster North (Edward Miliband) told us on Second Reading, however, there are a number of issues relating to the Bill that are not quite so clear-cut. Clause 16 contains a measure that requires designated energy generators—one assumes they consist mostly of renewable generators not in possession of a CfD, although that is not specified in the Bill—to make payments over a period of time that is now in excess of the six-month energy bill relief scheme in order to support that energy bill relief scheme. There is a difference between the two timescales in place under the Bill.

Nor is there clarity, particularly in clause 16, on what the Government mean by “designated energy producers.” What the Government will designate those producers to be is one of the remaining question marks about the Bill. How will the Government decide what the designation looks like? Who is going to be designated? Over what period? And who, by definition, will be excluded from that designation? When we are talking about renewable and low-carbon energy, it is pretty difficult to define exactly who is doing what, who is or is not making super-profits, and who may therefore be excluded from designation or within designation. We are talking about energy companies that run wind farms with renewable obligation certificates. In some instances, those ROCs are relatively recent, and in some instances they cover a longer period of time. The ROC scheme under which they were founded has very different effects.

--- Later in debate ---

[Dr Whitehead]

My hon. Friend makes a good, if somewhat speculative, point. As the Bill mentions, the Government are seeking to regularise the status of various renewable generators into some form of CfD arrangement, but of course the “compensation” one might get varies according to the status of those particular generators that do not have a CfD and are getting their remuneration by other means.

Of course, there are generators in this particular area that are not making super-profits, and indeed are not making profits at all, because in most instances they are community-owned wind farms with a large number of shareholders. The purpose of those shareholdings is, among other things, to keep bills down by paying dividends from the wind farm. Such arrangements should clearly not be designated in the same way as other arrangements, even though these wind farms are perhaps not in receipt of a contract for difference and may look like a number of other arrangements.

My plea is that, first, the Government should define, as soon as possible, what is going to be designated and how it is going to be designated. That should go well beyond what is in this Bill and ensure that those generators that are designated really are those that should pay into a scheme. After reading the Bill, I think it is possible to make those changes so that designation is fair and equitable. I am sure that the Government will, very shortly, want to come out with a scheme that enables that to happen. I will certainly be on the phone to the Minister if it does not happen very quickly.

[Graham Stuart]

That is our intention.

[Dr Whitehead]

I am delighted to hear that, and it is one gain from this evening’s debate.

On the third part of the Bill, I very much concur with a lot of what the hon. Member for Weston-super-Mare (John Penrose) said. The Bill gives powers to the Minister and the Secretary of State that provide for sweeping arrangements not only to intervene in energy markets, but to override Ofgem in various licensing arrangements. There is a power to give direction and a power to change licences, and a whole range of other measures. A number of industry figures are certainly concerned about the stability of investment they can undertake with those powers on the statute book, not knowing whether those changes could take place at short notice and in a way that may affect their investment decisions and the investment landscape for the future.

At the weekend, a senior source at one energy supplier suggested that the Secretary of State had undertaken a power grab “worthy of Henry VIII”. Obviously, our modernist Secretary of State may well be modelling himself on Henry VIII. I do not know whether he is, but this source said that this

“gives absolute power to the secretary of state over all rules governing all aspects of the UK’s energy industry, in perpetuity.”

He continued:

“That means bypassing Ofgem and the entire licensing and regulatory regime without any safeguards or time constraints and no consultation or appeal process for anyone—supplier, generator, networks—affected by any decision.”

So we are very concerned to ensure that those powers taken by the Secretary of State should at the very least have a sunset clause on them when the energy crisis has abated a little. As we can see from the legislation, no such sunset clauses are provided, which leads to a suspicion that this is a potential serious power grab by the Government, and these are powers to oversee the energy process without any of the checks and balances that we have in the system at the moment. If that is the Government’s intention, it is to be deplored. Again, I hope that at the very least the Minister could clarify his intentions on that section of the Bill and how he intends to limit the activity of these things over a period of time.

We have tabled a number of amendments, and as they relate to some of the comments I have made, I shall briefly address them. Amendment 1 would ensure that the full cost of reductions is passed on to customers. Although a passing through arrangement is contained in the Bill to deal with people such as landlords, park home owners and various others who are taking the rebates on bills on behalf of customers and supposedly passing them on but not actually doing so—I very much welcome those clauses—there are other arrangements for third parties in receipt of funds where they are not necessarily required to pass those rebates on to customers at all. For example, the Low Carbon Contracts Company gets money in from contracts for difference but is by no means obliged to pass that back to customers. It is supposed to pass this back to energy companies, but it does not have to do so, and the energy suppliers themselves have no obligation to pass it back to customers. The amendment tries to close some of those loopholes to make sure that all moneys related to this area are passed on to customers.

New clause 2, on the marginal cost of electricity, was mentioned by my right hon. Friend the Member for Doncaster North on Second Reading. The new clause would ensure that we would not be in this situation in the first place. If we had sorted out the whole question of the marginal cost of electricity as it relates to all electricity being effectively determined in retail price as if it had derived from gas and the much lower cost of renewables that we have at the moment in the system being effectively discounted, we would not have some of those renewable generators making “super-profits” and being perhaps subject to the ministrations of clause 16. That is because they would be working in the market on their own prices and looking competitively at a price set by their own boundaries, rather than working through gas in the first place. We think it is important that the Government take action on that quickly, which is what our new clause suggests we do.

I know we are running out of time, but let me come to our amendment on the Energy (Oil and Gas) Profits Levy Act 2022 arrangements. Again, as my right hon. Friend said on Second Reading, they were deplorable, as where fossil fuels are concerned 91% of profits can be returned back to those companies, and do not come to the customer to help reduce their bills, if they have investments in fossil fuels for the future. No such arrangement is provided for in this Bill as far as renewable generators are concerned; it is just a request for payment and nothing else. We want the Government to urgently look at this and bring forward a report on what the effect of reducing that 91% arrangement to 5%, for example, would have on the money that would be coming through to help customers pay their bills for the future.

Finally, as we mentioned on Second Reading, we have tabled a couple of amendments to start the process of payments from September, rather than the end of this year, as is proposed in the Bill. We think that would produce quite a lot more money for customers’ bills to be assured in the process. We understand that the Scottish nationalists are moving a manuscript amendment, new clause 18. It would worry us as it is calling for all the arrangements to be sorted out as far as what happens after six months is concerned within one month. We would prefer that we all united behind new clause 8, which would require full disclosure of the profits and turnover of oil and gas companies and various other generators over the next two years.

--- Later in debate ---

[Jim Shannon]

I want to begin by thanking the Government and the Minister for all that they have done thus far in the energy crisis. We all sometimes get a bit caught up with our lists of demands and the things we want done without appreciating the steps that the Government have taken; I want to put that on record before I start.

I am thankful that the people of Northern Ireland are to get the same support as those on the mainland. MPs from Northern Ireland had a Zoom meeting with the Secretary of State last Thursday, and we were very encouraged by what he said, by his delivery and by today’s legislation; this is good news and we thank him for that. Some 68% of households in Northern Ireland use oil, and there is a scattering of households across rural areas—some in my area and some out to the west of the Province—that still use coal, and we all know by how much the price of coal has jumped. The Secretary of State has given encouragement on how support will work for those who use the payment card system.

I want to make a plea on behalf of pensioners. Not every pensioner will use the £100 for energy, so I want to make sure there is a system whereby pensioners are protected and that, if they do not use all the money, the remaining sum can be carried over. The pensioners who have spoken to me about this want that reassurance.

My main reason for speaking is to make a plea for the working poor, as I did earlier in an intervention on the Secretary of State. I know that this finds receptive ears in the Minister and in the Government, because they see those issues that I see every day. There are people in full-time employment who were managing before the crisis but now have to find, for example, an extra £250 for their mortgage and an extra £30 a week for fuel for travel to Belfast from the peninsula. Dog food is also up by 30%, and groceries are up by 20%, with milk up from 99p last year to £1.75 this year—a 75% increase. Those are just a couple of examples of the massive increases that we are experiencing back home.

I go to work on an egg every day—two eggs, to be precise—but eggs are up from 99p for a six-pack to £1.39. Biscuits to go with a cup of tea, which we have in Northern Ireland with regularity, are up some 30%. Those are issues for the working poor, and that is not even adding in the energy issues. I want the Government to ensure that the working poor are key in what they do as they move forward. To be fair, I believe that they have.

I am thankful for the help given so far, but I believe that working families need that extra bit of consideration. They need help to get to work and help to pay for their groceries. They need an uplift in child benefit to allow them to ask for a wage increase. It is not about being able to take family holidays and eating out all the time; it is about surviving and being able to pay their mortgage and all else. What is being done to help those families? The Minister will give us some encouragement in summing up. It is good to have that on the record so that the people back home who ask me about these things will know what has been done. That is aside from energy costs, which are not even part of the equation at this stage.

There is the shop owner, for example, who cannot match the wage increases in the public sector, and her staff know that she cannot do any more than she is. How can we help them? It is great that public sector wages are going up, but how do small and medium-sized enterprises do the same? They cannot. The Government and the Minister must reach out and help. Those businesses are facing electricity bills at four times the previous rate. The hon. Member for Twickenham (Munira Wilson) referred to an increase of almost 550%. How can anybody absorb that? That is impossible.

The price of goods is up massively. Businesses are fighting to stay alive. The SMEs in my constituency—there is a large number of them—create employment across sectors. So never mind matching public sector pay; we must do more to secure jobs in SMEs by helping their owners.

I gave a commitment that I would not speak for too long, Mr Evans, so I will finish with this. I recognise that money does not grow on trees—if only it did, we could lift it off every day we wanted it—but we do need employment and businesses who hire people. For the working poor, will the Minister and the Government do that wee bit more to ensure that they will not suffer adversely through the crisis that we are all experiencing together?

[Graham Stuart]

I thank all speakers for their contributions, which have been typically thoughtful. It was a pleasure for the whole Committee and it seemed right to have the ever-genial hon. Member for Strangford (Jim Shannon) bringing the Back Bench contributions to a close. I have a lot to cover but will none the less try to keep myself to a limited time.

The hon. Member for Southampton, Test (Dr Whitehead), who spoke for His Majesty’s Opposition, asked whether we will need to amend the Bill because of the changes announced this morning by the Chancellor. Counsel’s advice is that we will not. The powers in the Bill fit perfectly well with that six-month period and any review and extension that comes thereafter. He also asked about the definition of electricity generators, including community groups, and the appropriateness of that. The affirmative procedure will be used for the first regulations precisely to allow us to define that, understand that and ensure that we are targeting the organisations we wish to target and excluding those we do not.

On Henry VIII powers, and why clauses 21 and 22 do not have sunset clauses, the Bill makes clear that the clauses must be used in response to the current energy situation, or in connection with the Act, regulations or schemes within it. The vast majority of the powers in the Bill are time-limited, including the powers to make regulations and schemes that might require such modifications and directions.

--- Later in debate ---

[David Linden]

Will the Minister give way?

[Graham Stuart]

I am going to press on, if I may.

Turning to amendments 2, 3, 10 and 11, and new clauses 7, 9 and 17, for amendments 10 and 11, designating a scheme is simply a matter of identifying the scheme documents that the Secretary of State already has the powers to provide. Therefore, the affirmative procedure would be disproportionate. New clause 7 requires the undertaking of an impact assessment on setting the price reduction at pre-April Ofgem cap levels. The unprecedented level of support introduced via the scheme and others in the Bill means that I do not think this is necessary and I ask Members not to press it to a Division.

[David Linden]

Will the Minister give way?

[Graham Stuart]

I have so much to do and a duty to cover as much as I can, having agreed not to go on too long.

New clause 9 aims to remove regional variations from standing charges. Ofgem, which is responsible for the network charging regime, is considering that matter and we should not pre-empt the review’s outcome in the Bill.

Amendments 2 and 3 aim to enable the backdating of the gas price reduction scheme in Great Britain to begin from 8 September. The Government have designed the scheme to work in combination with the 22 May cost of living package to which I referred. That ensures that the most vulnerable households will see little change in their energy between last winter and this. I therefore do not see any need to alter the operative date of the energy price guarantee schemes.

I move on to amendments 19, 17, 18 and 7, new clause 5 and amendment 5 on the energy bill relief scheme. On amendments 17 and 19, the Government fully intend to introduce regulations under clause 9 and we expect them to be laid in Parliament by the beginning of November. I have committed to publishing a review of the scheme in three months.

[Barry Gardiner]

Will the Minister give way?

[Graham Stuart]

If the hon. Gentleman will allow me, I will try to cover—

[Barry Gardiner]

The Minister did actually refer to me.

[Graham Stuart]

Indeed. On amendments 5 and 7, I am pleased to note that the hon. Members for North Shropshire (Helen Morgan) and for Richmond Park (Sarah Olney) agree with my decision to extend the eligibility date for customers on fixed-term contracts back to 1 December 2021. I hope that they also welcome our commitment to review the scheme, and I hope that that will please the hon. Member for Brent North.

[Barry Gardiner]

Will the Minister give way?

[David Linden]

Will the Minister give way?

[Graham Stuart]

The hon. Member is so persistent that I will give way to him.

[David Linden]

Hope springs eternal. In his summing up, the Minister has not yet touched on new clause 1. I suspect that that is nothing to do with the fact that he does not know what a tenement is, but can he touch on new clause 1, please?

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[Graham Stuart]

I addressed new clause 1 in my remarks at the beginning of the Committee. I do not know whether the hon. Gentleman was here, but if he was, he should have paid attention, and if he was not, I suggest he should have been.

I turn to amendments 16, 6 and 9 and new clauses 12 and 10 regarding consumers who are off the gas grid. Amendment 16 seeks to establish a domestic fuel reduction scheme in Great Britain for off-gas grid homes. The Government are providing a set payment to such homes through the alternative fuel payment scheme. There has been a lot of attention on off-grid homes.

[Alan Brown]

Will the Minister give way?

[Barry Gardiner]

Will the Minister give way?

[Graham Stuart]

I will not. Amendments 6 and 9 and new clause 12 would require equivalent support for domestic and non-domestic consumers. We have committed to providing equivalent support for consumers on alternative fuels. The Secretary of State has said that he will put the workings in the Library, and I appeal to hon. Members on both sides of the Committee to recognise that the support is comparable. It is therefore important not to tell those who are off-grid that they are not getting comparable support when indeed they are.

[Barry Gardiner]

On a point of order, Mr Evans. Will you confirm that when a Minister, or indeed, any Member of Parliament, refers by name to another Member, it is courtesy and normal practice to allow them to respond to the point that was made? Indeed, in this case, the Minister talked about me doing more, as a Minister in the Labour Government, on ensuring that we had insulation. However, he seems to forget that in 2013, his Government cut that by 92%—

[The Second Deputy Chairman of Ways and Means (Mr Nigel Evans)]

Order. The hon. Gentleman is doing an intervention now. Is the Minister giving way?

[Graham Stuart]

The hon. Gentleman has just shown why no one in the Chamber wished me to give way to him, other than himself.

The Government have committed to delivery of the payment this winter. Requiring that payment to be made directly to consumer bank accounts would significantly slow this down. Similarly, new clause 10 would require the Government to implement a heating oil voucher scheme for households in Northern Ireland. Again, that would significantly slow down delivery, so one of the challenges that we have had in engineering the various programmes is to make sure—

[Alan Brown]

rose—

[Graham Stuart]

In the knowledge that the hon. Gentleman is succinct and will be welcomed by the Committee, I give way to him briefly.

[Alan Brown]

I am grateful. Our amendment 16 echoed the language that is in the clauses on the electricity and gas support mechanism by stating:

“The Secretary of State may establish a domestic fuel reduction scheme…for off gas grid”

properties. It does not compel the Government to do anything; it just gives them the power to do that. Why will the Minister not accept that simple amendment, which states that the Secretary of State “may establish” that scheme?

[Graham Stuart]

There are many statutes that include the word “may” from which we can take it that the Government will do what is set out. I am pleased to say that it is absolutely our intention to ensure that those off grid are treated comparably to those on grid.

[Peter Aldous]

The past 10 years have been remarkably successful, with the offshore wind industry and the Government working hand in hand. The industry has raised genuine concerns, which I briefly outlined in relation to clauses 16, 19 and 21, about the direction of that relationship and how it is being imperilled. Will the Minister agree to meet the industry and address those concerns as the Bill progresses?

[Graham Stuart]

As my hon. Friend would doubtless expect, I regularly meet energy companies. I have absolute confidence. One of my biggest concerns when we were looking at the package was to ensure that there are no disincentives to investment in renewables. It is noticeable that the EU has come up with a scheme. We are talking about prices linked to gas that are completely outwith any of the expectations of those who run long-standing nuclear and other low-carbon production. This is an intervention that deals with prices well beyond any prior expectation. It will therefore not disincentivise or undermine any existing business plans.

The contracts for difference that this Government brought in are now being mimicked around the world. In the last auction, 11 GW came in: so successful was it that we are now moving to annual auctions and CFDs. It is also worth saying, on the record, that renewables obligation certificates and other support mechanisms are being entirely honoured; this measure is merely about the spot price, which is excessive. We will come forward with further proposals in due course and will consult with the industry and others to ensure that we act in a way that does not disincentivise investment.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clauses 2 to 30 ordered to stand part of the Bill.

New Clause 3

Report on additional expenditure treated as incurred for purposes of section 1 of the Energy (Oil and Gas) Profits Levy Act 2022

“(1) The Secretary of State must, within six months of the date of Royal Assent to this Act, publish and lay before Parliament a report on the effect of reducing the amount of the allowance under section 2(3) of the Energy (Oil and Gas) Profits Levy Act from 80% to 5%.

(2) The Report must set out projections of the effect of the reduction set out in subsection (1) on domestic and non-domestic energy bills.”—(Dr Whitehead.)

This new clause requires the Secretary of State to produce a report assessing the impact of reducing the investment allowance for oil and gas companies as set out in the Energy (Oil and Gas) Profits Levy Act from 80% to 5%, and in particular to assess such a reduction’s impact on domestic and non-domestic bills.

Brought up, and read the First time.

Question put, That the clause be read a Second time.