Draft Energy-Intensive Industry Electricity Support Payments and Levy (Amendment) Regulations 2026

Debate between Greg Smith and Gareth Snell

Wednesday 4th February 2026 General Committees

[Greg Smith (Mid Buckinghamshire) (Con)]

As ever, it is a pleasure to serve under your chairmanship, Ms Vaz.

Energy-intensive industries have long been the backbone of our industrial economy. From steel and chemicals to ceramics and refining, these sectors provide skilled jobs, anchor local communities and guarantee our economic security, yet they are operating in an increasingly hostile environment driven largely by the cost of energy.

The draft regulations will make limited but important amendments to the energy-intensive industry electricity support payments regime. Specifically, as the Minister says, they will increase the compensation available under the network charging compensation scheme from 60% to 90% from April 2026 and will extend the application window from one month to two. The changes are made using powers under the Energy Act 2023 and are intended to strengthen the British industry supercharger package. The stated aim is to lower electricity costs for the most energy-intensive sectors, reduce the risk of carbon leakage, and help retain manufacturing investment and jobs in the United Kingdom.

The Opposition will always welcome measures that provide greater clarity and modest additional support for industries under pressure. However, it is impossible to consider this instrument in isolation from the wider context. Britain’s industrial electricity prices are among the highest in the world. On a per-kilowatt-hour basis, our electricity costs are the most expensive in the G7 and the European Union—around 46% higher than the median. Industrial electricity prices here are around four times higher than in the United States, and roughly 50% more than in France and Germany.

As my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie) has rightly said in other debates, Government policy risks accelerating the deindustrialisation of this country, from Stoke in the Potteries to the Prax Lindsey oil refinery in Lincolnshire.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

I never miss an opportunity to talk about ceramics. When the hon. Gentleman listed the sectors that the scheme helps, he mentioned ceramics. Given that the supercharger scheme was set up by his Government, he will surely know that it does not cover the ceramics sector: the product standard industrial classification codes that were specifically listed when the scheme was set up excluded ceramics. Can the hon. Gentleman tell me why his Government decided that ceramics were not entitled to the level of support that they put in place for other energy-intensive industries?

[Greg Smith]

The hon. Gentleman is right to raise that point; I have always been impressed, on a cross-party basis, by the passion with which he speaks for industry in his constituency. My point is that we need to talk to those industries that do not currently have the support. I noticed that the hon. Gentleman bobbed to try and catch your eye, Ms Vaz, so perhaps he will have some helpful comments for the Minister on that front when he is called.

I am making a point about the wider context in which we have to see the statutory instrument. The most glaring omission is the oil and gas industry in the North sea. Energy-intensive industries are not just struggling; they are being driven overseas by costs that they simply cannot absorb. The very thing that the Minister said he was trying to prevent is happening. Since Labour came into government, more than 15,000 manufacturing and industrial jobs have already been lost, largely because of astronomical energy costs combined with unnecessary green levies and carbon taxes. When manufacturing moves abroad, we do not eliminate emissions; we simply offshore them, often to countries like China with weaker environmental standards and far greater geopolitical risk.

We have also heard clear warnings from industry leaders. Sir Jim Ratcliffe has been explicit that high taxes and energy costs have left sites such as Grangemouth unable to compete with overseas rivals. These are not abstract concerns, but real decisions affecting real jobs. Against that backdrop, while the draft regulations make proportionate and technical changes, they do not address the fundamental problem. Increasing compensation within a flawed system is not the same as fixing the system itself. The best way to reduce electricity prices for energy-intensive businesses is to tackle costs at source by scrapping the energy profits levy and removing punitive carbon taxes that undermine competitiveness.

I would be grateful if the Minister could clarify how this statutory instrument fits into a broader long-term strategy for energy-intensive industries. Does he accept that compensation schemes, while welcome, cannot substitute for the structural reform of energy pricing? Can he assure the Committee that the Government are developing a plan that genuinely restores Britain’s industrial competitiveness? Ultimately, energy-intensive industries know that their future depends on predictable affordable energy. If we are serious about growth, resilience and security, the Government must ensure that the policies of this country enable those industries to survive and thrive at home, not drive them abroad.

Sustainable Aviation Fuel Bill

Debate between Greg Smith and Gareth Snell

2nd reading
Wednesday 11th June 2025 Commons Chamber

[Greg Smith (Mid Buckinghamshire) (Con)]

Before I begin, I draw the House’s attention to my entry in the Register of Members’ Financial Interests, with respect to a donation from P1 Fuels. Although it does not make aviation fuel, it was in the synthetics business, and—as the Minister well knows—I ran a classic Land Rover on that fuel last summer to prove the point that this stuff works.

The test that net zero must meet is that all our constituents must still be able to do everything they do today—be it fly on holiday, drive, or get a ferry or anything else that runs on a liquid hydrocarbon—and that businesses must still be able to move goods around the world and trade at the same price as today, or for an equivalent price, just greener. In that, technology is our friend, as is the innovation we see—particularly on these shores, but also innovation that is happening abroad. As my hon. Friend the Member for Orpington (Gareth Bacon), the shadow Secretary of State, said earlier in the debate, the Opposition do not seek to divide the House on Second Reading. This Bill is an extension of the previous Government’s agenda in this regard, and we fully recognise the need to replace fossil fuels over time and, in this instance, to replace aviation fuel with a cleaner, greener alternative. However, there will be key questions that the House should look at as this Bill goes through Committee and its later stages, which do need answers. We have heard some of those questions throughout this afternoon’s debate.

We have had a good and wide-ranging debate, with very little deviation from the core consensus that sits underneath the Bill. On the Conservative Benches, my hon. Friend the Member for Mid Bedfordshire (Blake Stephenson) made the important point that aviation will be critical to get the tourists into the new Universal theme park in Bedfordshire when it eventually opens. He also focused on the important role that Cranfield University and industry in his constituency are playing—they are providing part of the solution to the problem that this Bill seeks to support and deliver. Equally, he asked the legitimate question of how the United Kingdom mechanism and mandate compare with those overseas, which I hope the Minister will reflect on in his winding-up speech.

On the Government Benches, the chairman of the Transport Select Committee, the hon. Member for Brentford and Isleworth (Ruth Cadbury), spoke well and in an informed way on this subject. She and I both served on the Transport Committee in the previous Parliament, and we both worked on the inquiry and report on the fuels of the future that the Committee produced during that Parliament. She rightly made good points about the supply of waste for SAF technology and the trade-off with energy from waste facilities, for example. There will have to be some conversations within Government, particularly with the Ministry of Housing, Communities and Local Government, about the way in which so many councils, including my own in Buckinghamshire, now send all general waste to an energy from waste facility. Those incinerators and facilities have been financed through multi-decade deals, and if we are to get that waste into SAF production, some of those deals will inevitably have to be undone or renegotiated. Who will bear the cost of that?

The hon. Lady equally raised an important point about bioethanol—I do not know whether it was just shadow Ministers who received an email from Vivergo Fuels this week, or whether it was all Members of the House. That email gave a pretty stark warning, particularly about the impact of the US trade deal that the Government have done on the bioethanol space. Essentially, it warned that that deal could completely undermine the UK bioethanol industry. That is a serious concern that the Department for Transport and the Department for Business and Trade will have to work out if we are to have domestic bioethanol production, as much for sustainable aviation fuel as for petrol. We largely all fill up—unless we have classic cars—with E10 at the pump. E5 is still 5% bioethanol. As this Bill passes through the House and as the petrol debate for road cars moves on, that serious question will have to be answered. When we get a warning from industry as stark as the one from Vivergo Fuels, it needs to be addressed.

The hon. Member for North Somerset (Sadik Al-Hassan) mentioned the role of hydrogen in the mix, and I look forward to debating that with him when he has a debate on this issue in Westminster Hall next week, I think. He is absolutely right that there are other technologies and other fuels out there. The hon. Member for Derby South (Baggy Shanker) correctly pointed out that there can be no net zero without many of the elements of this Bill. The hon. Member for Doncaster Central (Sally Jameson) spoke passionately about Doncaster airport and the sustainable future that the Bill will help bring about.

The hon. Member for Falkirk (Euan Stainbank) spoke in support of the Bill, and the hon. Member for Kilmarnock and Loudoun (Lillian Jones) spoke in an informed way about SAF production, which forms such an important part of the Bill. The hon. Member for Norwich North (Alice Macdonald) rightly spoke of the innovative landscape, although the drone taxis did worry me a little bit—I am not sure we have completely got goods being delivered properly by drones yet, so we should do that before we start putting people in them. Equally, she rightly spoke about the world-leading engineering jobs that will be created.

The hon. Member for Alloa and Grangemouth (Brian Leishman) slightly broke the consensus, but he was entirely right to speak up for his constituents and his constituency interests so passionately. I think there is a legitimate debate about the refineries that we have lost, the refineries that we still have and how this debate intersects with them.

I will not dwell too much on the puns of the hon. Member for Harlow (Chris Vince). I thought he was a teacher before he entered this House, but perhaps he also wrote for Bobby Davro, given some of the puns he came up with.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

For the benefit of younger Members, Bobby Davro was a comedian.

[Greg Smith]

The hon. Gentleman shows my age, and no doubt his own, with that sedentary interjection.

The hon. Member for Harlow was right to focus on the skills agenda that underpins this legislation, on which I do not think we have heard so much from the Government. Likewise, the hon. Member for North West Leicestershire (Amanda Hack) rightly pointed out the lived experience of Jet2 and the impact on cargo. We have heard a lot in this debate about moving people around the country and the world using aviation, but not so much about cargo, which is an equally important part of our role as a global trading nation. The hon. Member for Dunfermline and Dollar (Graeme Downie), putting aside his little geek-off with the hon. Member for Sutton and Cheam (Luke Taylor), was right to focus on that agenda of moving goods as well as people.

We also heard from Teesside, with the hon. Member for Middlesbrough South and East Cleveland (Luke Myer) and the hon. Member for Stockton North (Chris McDonald). In fact, I am a little worried. This morning I was in Westminster Hall with the hon. Member for Stockton North, for a debate on the space industry, in which I agreed with every word he said, and I am a bit nervous to say that I agreed with him this afternoon, too. That does not often happen in this House, but he was absolutely right that all our constituents work hard and save hard. They want that family holiday or that weekend away or whatever it is every single year, and it would be a gross dereliction of duty for any of us to lumber them with higher airfares or to try to make their holidays more expensive. That is not what any of them send any of us here to do; they want us to ensure that they can still live their lives in the way they wish.

Briefly, the hon. Member for Sutton and Cheam warned us that he might be boring but, uncharacteristically for a Liberal Democrat, he actually was not. [Laughter.] I very much enjoyed his speech and the knowledge that he brought from his 16 years of work in the aviation sector. The hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter) was equally right to focus on another matter that a few Members have raised in the debate: the use of SAF by our armed forces, particular the Royal Air Force and the Royal Navy.

The use of technology, from fuels derived from waste and feedstock to pure synthetics, is where I think much of the debate will go in the coming years. In fact, the technology to enable us to move on from those feedstock and waste-derived fuels already exists. In 2021 the RAF flew a plane not on a blend of SAF, but on 100% synthetic fuel made right here in the United Kingdom by a company called Zero Petroleum, which was mentioned by my right hon. Friend the Member for Goole and Pocklington (David Davis).

Let me now turn to a part of the agenda on which I think we will need to have a conversation when the Bill goes into Committee. The Bill gives no detail on the approach to be taken regarding the specifics of the contracting between the producer and the counterparty, the Government contractor for the strike price. In the background material, especially that which can be found in the Government’s response to the consultation on the SAF revenue certainty mechanism, the ambitions are largely there, and we are not critical of the ambitions that sit within that document, but it might be beneficial to be sure that the contracting will follow those ambitions.

Given that the SAF mandate already in force includes a ringfenced mandate for an electro-sustainable aviation fuel quota, it is critical that eSAF projects are supported equally within the revenue certainty mechanism. It is important both to develop a UK market for SAF and eSAF, and local production as created by the Bill and the mandate, and to support and encourage the use of home-grown technology for the manufacture of SAF and eSAF, as that not only retains revenue within the United Kingdom but leverages a huge amount of revenue for future exports through technology licensing. Sadly, a great many projects supported by grants from the Advanced Fuels Fund are using foreign technology.

Perhaps I could suggest that the Government reflect, ahead of the Committee stage, on the possibility of adding another ambition to those that they have already set out: namely, to reward or incentivise the use of UK technology in projects supported by the revenue support mechanism. The House may be surprised to know that, despite the various programmes of UK Government support for SAF and eSAF, AFF grants, SAF mandates and the SAF revenue certainty mechanism, no UK Government bodies are mandated to support the development of the core technologies of fuel synthesis.

We have a great tradition of research and development in this country. Companies such as Zero Petroleum have been funded entirely by private capital—which is largely a good thing—and also through some of their RAF and Ministry of Defence contracts, for different reasons. Notably, however, the Aerospace Technology Institute is the Government-funded body that should be supporting SAF and eSAF manufacturing technology. It supports everything else, including hydrogen and electric aircraft, but, bizarrely, it is not permitted to fund SAF and eSAF technology programmes. That is a huge misalignment in the strategy, which I hope the Minister can address.

I have a few key questions for the Minister, and he is showing great enthusiasm about answering them. We will be spending three days in Committee, so there will be many more to come.

Employment Rights Bill

Debate between Greg Smith and Gareth Snell

Report stage
Wednesday 12th March 2025 Commons Chamber

[Greg Smith]

My hon. Friend served assiduously on the Committee, raising many good points, including the one that he just made, which I absolutely agree with. The public will be asking serious questions about this.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

rose—

[Greg Smith]

If the hon. Gentleman wants to try to defend that, I will give him the opportunity.

[Gareth Snell]

I am happy to declare my interest as a member of three trade unions, but I got less from them than the shadow Minister got from a small business—I think his declaration is £12,500. Does he feel the need to declare that, given that he is now making a case against legislation that would impact that company?

--- Later in debate ---

[Greg Smith]

I am making a point about the trade union movement, which I have never been a part of, and certainly never received any money from. I am happy for the hon. Gentleman to look at all my declarations in the Register of Members’ Financial Interests.

[Gareth Snell]

On a point of order, Madam Deputy Speaker.