Household Energy Bills: VAT

Greg Hands Excerpts

Tuesday 11th January 2022 Commons Chamber

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

I thank right hon. and hon. Members for their valuable contributions to this debate.

I can fairly describe the main thrust of our debate as: wholesale gas price volatility has caused many problems—what are the Government doing about it? By contrast with what the right hon. Member for Doncaster North (Edward Miliband) said, we have everything to say about this issue. There are two main parts to the Government’s answer, and the first is about making significant improvements to our energy supply, with more energy.

Our long-term strategy is about finding effective replacements for fossil fuels that are reliable and do not expose us to the volatility of international commodity markets. That means investment in renewables, as my right hon. Friend the Member for Kingswood (Chris Skidmore) pointed out, and in nuclear energy, which will be key to achieving that aim. In both areas we have made massive progress since 2010 and continue to do so. As of 2020, renewables contributed 43% of our electricity mix. I checked who the Secretary of State for Energy and Climate Change was in 2010: of course, it was the right hon. Member for Doncaster North. Renewables are now six times the level they were when he was Secretary of State, when they contributed just 7% in that year.

On 13 December, we launched our biggest-ever contract for difference renewables auction—the largest yet—with a goal of around 12 GW, which is more capacity than the previous three rounds combined. That was a major step towards delivering the Government’s increased ambition. We already have the world’s largest installed offshore wind capacity, which was created under this Government, but we are not resting on our laurels: our ambition is to quadruple that over the next decade. It is a proven technology that is moving us away from the volatility of gas and other fossil fuels.

There is a key role for nuclear. I am delighted that the Labour party supported in principle the Nuclear Energy (Financing) Bill last night. That is a far cry from Labour’s 1997 manifesto, in the writing of which I think the right hon. Member for Doncaster North was involved. In that year, the Labour manifesto said:

“We see no economic case for the building of any new nuclear power stations”.

The lost time on nuclear is entirely down to the Labour party.

I am delighted that we have the new regulated asset base model for the financing of new nuclear power stations.

[Several hon. Members rose—]

[Greg Hands]

I am not giving way.

There is £1.7 billion of funding to support our objective of approving at least one new large nuclear power project by 2024, as well as the new £120 future nuclear enabling fund. Nuclear will play a vital role in the reduction of volatility in the energy system and work hand in hand with renewables to produce reliable power for generations of consumers to come.

Let me turn to the points raised by my hon. Friend the Member for South Thanet (Craig Mackinlay). It is a misnomer to say that the Government are not appreciative of the efforts currently being made on issues such as the North sea. It is not right to say that we have not welcomed more investment in the North sea. In the final quarter of 2020 alone, five new gasfields came onstream: Arran, Columbus, Finlaggan, Tolmount and Blythe and Elgood. The majority of our gas consumption still comes from domestic production; of the rest, the biggest part comes from Norway, which provides more than half our imports.

There is this idea that storage would have helped. Storage does not help when there is a price issue. It might help when the issue is supply, but here it is price. Being able to store high-cost gas does not help with a price crisis.

The protection of households is vital to the Government. We are committed to supporting vulnerable households with their energy bills. My right hon. Friend the Chief Secretary to the Treasury pointed out many of the important schemes that we have in place, not least the energy price cap, the warm home discount scheme, the energy company obligation, the solar process, which has led to the ability to transfer people’s energy provision from one company to another seamlessly and without cost to the consumer, the winter fuel payment, and the £500 million household support fund. They are all in place to help and protect consumers.

We have had a very good debate. If I may say so, we had some fantastic contributions from my own side of the House. My hon. Friends the Members for Birmingham, Northfield (Gary Sambrook) and for Stoke-on-Trent South (Jack Brereton) spoke passionately about Government help for residents in their constituencies. My hon. Friend the Member for Brecon and Radnorshire (Fay Jones) spoke about her rural constituency and again highlighted support from the Government in her area. My hon. Friends the Members for Ashfield (Lee Anderson) and for Mansfield (Ben Bradley) forensically and skilfully took apart the Labour motion. We had thoughtful speeches on net zero from my right hon. Friend the Member for Kingswood and my hon. Friends the Members for Devizes (Danny Kruger) and for North Norfolk (Duncan Baker), who also looked in detail at the workings of the energy market.

My hon. Friend the Member for South Thanet called for changes in energy policy. There are changes. The main one is that we are producing more energy. We are producing more renewables and more nuclear. We are making sure that we get as much gas as we can from UK domestic sources. That is the basis of our energy policy.

In contrast to the Opposition, we have a plan. I have outlined what it is. Labour Members do not have a plan. A four-page motion is not a plan. This is a student union tactic, which they rehearsed well during the Brexit years. I thought that the departure of the right hon. Member for Islington North (Jeremy Corbyn) as leader of the Labour party might herald a return to serious Opposition politics. To be fair to the hon. Member for Leeds West (Rachel Reeves) and the right hon. Member for Doncaster North, they were part of what was a more serious Labour Opposition from 2010 to 2015. I give them that credit, having done Opposition politics myself from 2009 to 2010. It all started well for them. On Sunday, there was that classic briefing to The Observer about their plans, and a full media round on Monday. It was all looking good until they arrived here today and produced this four-page, 20-clause, student union motion. The first line mentions “households” and “bills”. In the following four pages, there is no repeat of those words. Instead, we have multiple mentions of “motion”, “proceedings”, “amendments” and even the term “dilatory Motion.” They have completely lost the plot and disappeared into their own world of procedural gobbledegook. The Opposition have no new plan and no new thinking. Their motion does not deserve serious consideration today and should be comprehensively rejected.

Question put.