Energy Security Debate
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Harriet Cross
Main Page: Harriet Cross (Conservative - Gordon and Buchan)Department Debates - View all Harriet Cross's debates with the Department for Energy Security & Net Zero
(3 weeks, 6 days ago)
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Several hon. Members rose—
Ed Miliband
Because if we did that, we would end up in climate disaster. That is the truth.
Ed Miliband
I am not going to give way.
Don’t take my word for it. This is what the Energy Transitions Commission, which includes energy companies, says:
“Any national strategy which assumes that all fossil fuel reserves must be exploited is incompatible with limiting global warming to safe levels”.
The truth is that new licences are totally marginal to the North sea.
Ed Miliband
I am going to make some progress, and then I will give way.
For nearly two years, we have been moving at speed on our mission to make Britain a clean energy superpower. We came to office amid a legacy of the irrational onshore wind ban; the fiasco of the allocation round 5 auction, with no offshore wind secured; and years of dither and delay on nuclear—the shadow Secretary of State amused me on nuclear, and I will come to that in a second. The Conservative Government left us exposed through 14 years of neglect, and we are clearing up their mess.
In less than two years—opposed every step of the way by the Conservative party—we have secured enough clean energy for the equivalent of 23 million homes through two record-breaking renewables auctions, but the lesson of these two fossil fuel crises is that we need to go further and faster.
Ed Miliband
I am going to make some progress. By contrast, we stand for national security through energy security and energy independence.
How we protect consumers is very important. My right hon. Friend the Chancellor showed at the Budget last year that she took decisions to raise taxes, including on the wealthiest, so that we could cut bills for everyone, and we saw that happen in April. The Gracious Speech also includes legislation to raise the rate of the electricity generator levy from 45% to 55%, as part of our plan to break the link between electricity and gas prices, and act on the excess profits that arise from that link. We are also making a big call: keeping in place the windfall tax on oil and gas profits during this conflict. In the last few weeks, we have seen profits from major oil and gas companies soar.
Ed Miliband
No, I am not going to give way. These are unearned profits as a result of the war.
Ed Miliband
I will just make a bit of progress. We say tax those profits to help the British people.
Ed Miliband
No, I am not giving way. The energy profits levy has raised £12 billion since it was introduced in 2022.
Ed Miliband
No, I am not giving way.
At this moment, what have the official Opposition, alongside the SNP, decided to call for? They have called for the Government to dump that policy. Let us get this straight: at the precise moment that the British people struggle with the effects of the war, those parties say that the priority with scarce resources is to cut taxes for the largest oil and gas companies making record profits. Let us be clear: no amount of false accounting or fuzzy maths can hide the facts about the idea of cutting these taxes at this moment of windfall profits to improve revenues.
Harriet Cross
I thank the Secretary of State for giving way. Just so that no one is under any false interpretation of what that tax does and how it works, does the Secretary of State understand that the tax does not apply to trading nor to overseas production? It is on production from the North sea, which is not where those profits are being made, is it?
Ed Miliband
The hon. Lady obviously does not understand that prices are going up, including from the North sea. Let us look at the amount that the tax raises. According to the Office for Budget Responsibility, even before this crisis the windfall tax was forecast to raise £5 billion by September 2027. Conservative Members—the official Opposition—have to explain: where is the money going to come from, then? They are going to cut that tax of £5 billion for the biggest oil and gas companies. By contrast, we believe that we should tax fairly and use the resources to help the British people.
Pippa Heylings
I definitely welcome that; as the hon. Gentleman will hear later in my speech, we want to go even further. As we know, it is Liberal Democrats who fix people’s church roofs and put the solar panels on them.
For too long, the pace of change has been too slow. It has left people and businesses trapped, at the mercy of a broken energy system that they are literally paying the price for. It is time to take back control of our energy future, and that starts with our communities. In the last Session of Parliament, I welcomed the Government agreeing with our calls to include community energy and community benefits in the Great British Energy Act 2025. Now communities must be given the right to sell and buy energy locally, and we must mandate community benefit requirements where communities host renewable infrastructure. The transition must be done with those communities, not to them.
I also welcomed the adoption of the New Homes (Solar Generation) Bill, or sunshine Bill, introduced by my hon. Friend the Member for Cheltenham (Max Wilkinson), which requires solar panels on all new homes—but why wait until 2027, and why not go further? We Liberal Democrats want to see solar on new warehouses and car parks, turning rooftops across the country into sources of clean, affordable power. We also want to see solar panels on schools and hospitals. Since 2019, energy bills for schools and the NHS have more than doubled, forcing impossible choices between heating and healthcare or between bills and books. The current Government investment reaches less than 1% of schools. Liberal Democrats would go further and faster, helping to protect frontline budgets for our schools and hospitals.
Families, too, want to do the right thing; there has been a record increase in sales of solar panels and heat pumps since the start of the war in Iran. We must build on that momentum and help households and small businesses to take back control of their bills, giving them access to zero-interest or low-interest loans for upgrading properties by establishing an energy security bank to support electrification.
At the same time we need to fix the broken energy market. It remains absurd that electricity is still priced so highly compared with gas, meaning that people are often not rewarded for electrifying their homes and businesses. It is also crazy that consumers are paying billions to switch off our wind turbines when the grid cannot cope with surplus renewable generation. That is why I welcomed the recent steps taken to begin breaking the link between gas and electricity prices, a reform that the Liberal Democrats have long called for. However, we urge the Government to go further and faster in their Bill: moving unfair policy levies off electricity bills, providing a progressive social energy tariff for those unable to absorb repeated bill shocks, upgrading grid infrastructure and ensuring that customers benefit directly from cheaper renewable power through flexibility when there is surplus renewable generation.
Yes, we need energy independence, but that does not mean isolation. The UK and the EU have deeply interconnected energy systems, but the damaging Brexit deal has meant a huge increase in energy costs. Our future lies in ever closer energy ties to our nearest neighbours, and this Government need to drop their red lines on Europe. Rejoining the EU’s internal electricity market and linking our emissions trading schemes will reduce costs and strengthen resilience.
My right hon. Friend the Member for Kingston and Surbiton (Ed Davey) was right to say that
“it is simply fantasy and fabrication for some in this House to pretend that there is a solution in the North sea”—[Official Report, 13 May 2026; Vol. 786, c. 31.]
to people’s high energy bills. Even when North sea production was at its peak nearly 30 years ago, the UK was still exposed to global price shocks, because we have been price takers. Nor is the answer fracking, which some are calling for; it destroys our countryside and pollutes our waterways. We will push for a complete ban on fracking and complete clarity on closing all the loopholes.
We need a secure energy mix, and that includes nuclear; we believe that small modular reactors have great potential to strengthen energy security alongside renewables. Oil and gas will also be part of that energy mix for decades to come, but we must recognise the need for a fair and managed energy transition, given that our remaining reserves are in decline. Communities cannot be left behind. We urge the Government to establish a just transition commission, to future-proof supply chain jobs, and to enable the retention of our brilliant, skilled oil and gas workers in high-quality jobs in renewables and other sectors.
Harriet Cross
Does the hon. Lady agree that new licences in the North sea would help protect the workforce and the supply chain, to help with the transition to new energies?
Pippa Heylings
Research has shown that the hundreds of new oil and gas licences awarded by the Government between 2010 and 2024 have resulted in only about 36 days’ worth of extra gas. We need to look at the jobs that people can move into. I think there were 75,000 jobs lost without any outcry from the previous Government. We are looking at a just energy transition that helps those high-skilled workers into jobs.
Tony Vaughan (Folkestone and Hythe) (Lab)
For more and more UK households and businesses, the monthly energy bill is one of their largest bills, and it is increasing. That is largely due to rising international oil and gas prices, which in turn have been exacerbated by the recent war in Iran. It is for exactly that reason that for too long we have been energy insecure. Energy security is needed to give us cost of living security. If we get this right, we can cut bills, cut emissions and cut our dependence on volatile foreign oil and gas markets, all at the same time. I have not yet heard a single argument from Conservative Members—including the hon. Member for Isle of Wight East (Joe Robertson)—about why continued dependence on those markets is a good idea, as opposed to a driver of price shocks and increases.
For most of the past 50 years the UK has been a net importer of electricity, much of it coming through interconnectors such as the one in my constituency. The growth in British renewables is at long last, and rightly, being pushed forward by this Government, and that is starting to reduce our heavy reliance on imported energy and fossil fuels. Last year our energy production was the most British and the most clean that it has been for years. Under this Labour Government, energy production has defied the doubters who decry the decline of North sea oil and gas, and who urge us to open new fields.
Harriet Cross
I just want to make sure that everyone is clear that the hon. and learned Gentleman is talking about electricity, rather than energy. He is talking about the power that makes up just 20% of our energy mix, not the oil and gas that makes up 75% of it. The two are very different.
Tony Vaughan
Interestingly, the hon. Lady has come up with no justification for continuing to be in hock to the international oil and gas markets, so my argument that that is not a good idea has been reinforced by her intervention.
I want us to be energy independent and, eventually, energy dominant, exporting our energy around the world, generating more revenue for the Treasury, creating more jobs here at home and helping to fix our current account deficit. The new energy security Bill rightly seeks to hardwire in strong consumer protections, a stronger watchdog and a more flexible, modern grid. Giving Ofcom a clearer duty to protect households, changing the way in which support is targeted at low-income and vulnerable families, and making local grids smarter so that people can benefit from cheaper off-peak energy are not technical tweaks; they are issues on the frontline of the fight against fuel poverty.
The vast majority of my constituents in Folkestone, Hythe and Romney Marsh want to tackle climate change and lower energy bills, and they want Britain to be energy independent. The best way of achieving all those objectives is to deliver a balanced energy mix, and to ensure that savings and opportunities reach people’s front doors. That means introducing a serious warm homes programme, upgraded insulation, modern heating systems, and clear duties for landlords so that renters are not left shivering in leaky homes while their landlords take all the profits. Solar finance has evolved to the point where there can be no excuse not to have a solar panel on every domestic rooftop, which could allow tenants as well as landlords to benefit from lower bills. The Government must do everything they can to make that a reality.
Renewables play a critical part in our energy production, along with new nuclear. We should continue to extract from the existing North sea oil and gas fields, but the Government are right to oppose the opening up of new fields. That would not lower people’s energy bills, because the oil and gas price is determined by global markets. Moreover, as many of my colleagues have said, it would undermine our mission to tackle climate change, and would weaken our global leadership role on the issue. I pay tribute to the Secretary of State and his Department for their work in that regard. The real jobs plan for energy is to invest in clean power, grids, storage and efficiency, and to give workers in existing industries a clear path into those new roles.
Harriet Cross (Gordon and Buchan) (Con)
Too often when we debate energy in this place it becomes tribal very quickly. Members are either in favour of oil and gas or renewables—there is no room for nuance. We need renewables, we need nuclear, but we also need oil and gas.
Many Members have spoken about the cost. Cost is one element, but supply is vital, because oil and gas makes up three quarters of the energy we need every day. It is the energy we need for the 24 million homes and over 500,000 businesses that still rely on oil and gas. Oil and gas is needed in industries such as pharmaceuticals and petrochemicals. The energy independence Bill assumes that just by calling it energy independence we are suddenly not dependent on oil and gas. That is not true, and that will not be the case far into the future because we have not developed the systems to move us away from oil and gas as quickly as we needed to.
Look at our nearest neighbours in Norway, a country that many people rightly think has its energy system done correctly. There are five flights a day from Aberdeen to Norway, taking skilled workers from what was once the oil and gas capital of Europe to work in the industry there. Norway has just said that it is going to open up three more existing gas fields, and has announced a licensing round for 70 new licences. Norway incentivises drilling because it recognises how important oil and gas is to its energy security.
Would any Member on the Government Benches like to tell me that the Norwegian Labour Government, by increasing their use and export of oil and gas from the North sea, are making Norway less energy independent? No, of course they are not. It is the UK Labour Government that are making the UK more dependent on Norway for our gas—we send £20 billion to Norway for the privilege of using the same gas from the North sea—and more dependent on liquefied natural gas from Quatar, America and Mexico. That LNG is liquefied, transported and regasified before it can be used here, so is less good for the environment.
Moving on to jobs, I will never understand how anyone can sit on the Labour Benches and not understand the importance of protecting jobs in the oil and gas sector. The Government mention new jobs in renewables. There are new jobs in renewables, but they are not coming on stream fast enough, they are not comparable, and they are not for the same skillsets. Some of those jobs are transferable, but loads are not, and the highly skilled people who have secured our energy security for the last few decades are the ones who are going to struggle to transfer. If Labour wants to say it is happy to sacrifice those jobs, those livelihoods and the communities those jobs live in—particularly in the north-east of Scotland—it can do so, because that is the message it is sending. Those skilled workers are moving abroad and taking with them the skills that will help us with our energy security and energy independence.
Labour talks about price a lot. We understand that the price of oil and gas goes up and down; that is understandable. Contracts for difference allocation round 7—AR7—signed us up to higher prices for 20 years. We have committed to paying those high prices for 20 years, which are higher than what oil and gas has been for the past few years. [Interruption.] I do not need wails; I appreciate that oil and gas is high at the moment, but it is not always high. It has been low—[Interruption.] The Minister for Energy says that that is the issue, and it is the issue if we look at one time horizon. Over the past few years, has oil and gas been low? The gas price has been low, the oil price has been low, and yet we still use it.
We are sacrificing jobs in Aberdeen and the north-east of Scotland and sacrificing our energy security just to deliver green energy, because that is all this Government want to focus on. This Government should be looking at what our neighbours in Norway are doing and seeing how it is seen as a truly energy-independent country because they are still using their oil and gas, because they know they need it—their energy systems and their country are not set up not to use it. The UK is not either. We need it, we must use it, and we should be drilling all we can from the North sea—starting today.
Andrew Bowie
My right hon. Friend is absolutely right. We are exporting emissions and exporting jobs, and that is having a detrimental impact on our economy and communities up and down this United Kingdom, not least in north-east Scotland. I see that every time I go home. One thousand jobs will be lost every month under this Labour Government, and we will lose out on £50 billion of investment. Pubs, restaurants and shops are closing up in the granite city under this Labour Government. The impact is being felt across the country—it is true—but it is in Aberdeen and the north-east of Scotland that the pain is most acute.
Harriet Cross
I wonder whether my hon. Friend could help me, because I do not understand why the Labour Government think that there is a need to ban new licences. They keep telling us that there is nothing left in the North sea, but if they thought that there was nothing there, why would we be banning ourselves from looking for anything?
Andrew Bowie
My hon. Friend puts it better than I ever could. She is absolutely right; it is completely nonsensical.
In Aberdeen there will be a referendum on this Government’s approach to the North sea in just a few short weeks. On 18 June, the people of what was until recently the oil capital of Europe will have their say on how they feel this Government have treated them and the industry of which they are so proud.
It is not just the production of oil and gas that is being driven to extinction by this Government’s policies. Nor is it just Aberdeen that is being affected by the Government’s anti-growth, anti-business policies: Lindsey, Mossmorran, Grangemouth, Denby, Pembrokeshire, glassworks and metalworks, potteries, refineries and chemical plants—heavy industry is being crushed by the cost of energy. Yet rather than trying to prevent that, this Labour Government are interested only in accelerating the industry’s decline.
The Government’s headlong rush to renewables may be well intentioned, but it is utterly bereft of common sense. This Labour Government are rushing towards a power system that depends on the weather rather than firm, reliable baseloads, exposing us to blackouts, just like the one we saw on the Iberian peninsula last year. Avoiding such blackouts and providing that energy baseload is exactly why the roll-out of new nuclear is an absolute priority. I am pleased that there is consensus on this and that the Government recognise the important role of nuclear in our future energy mix. That said, and as I have said before in this House, sadly this Government’s ambition for nuclear pales in comparison to that of ours when we were in government.
This Government’s failure to commit to a third gigawatt-scale reactor in Ynys Môn is a huge disappointment, not just for us on the Conservative Benches but for industry and the people in Ynys Môn too. The roll-out of small modular reactors is good, yes, but it curtails the possibility of gigawatt-scale power at Ynys Môn. A cynic might suggest that the decision was made to rush out the announcement in some desperate and hasty attempt to salvage the Welsh Labour party. Well, it is safe to say that that failed.
Back to ambition, the decommissioning of the UK’s stockpile of petroleum, the selection of only one small modular technology, and the refusal to follow our ambition of 24 GW of new nuclear is just not good enough.
Michael Shanks
I will come to jobs in the North sea in just a moment—a section of my speech is about that, given its importance. I have to say that I am absolutely incredulous: I can almost understand it from the Tories—thinking that a moment of windfall profits was the moment to cut taxes on oil and gas companies—but now we have a partnership of the SNP and the Tories who believe that now is the moment not to help people with their energy bills but to cut taxes for the biggest companies. That is an interesting lesson that we have learned.
The energy independence Bill is about how we go further. A number of hon. Members have raised fuel poverty. Fuel poverty in this country is not a misfortune; it is a scandal. More than a third of school pupils have told their teachers that they are cold at home. In one of the world’s largest economies, a third of children go to school to get warm. We must bring this to an end with new minimum energy efficiency standards for renters, a new warm homes agency to ensure that high home grades are not, as they have been for too long, the preserve of just the well off, and a strengthened Ofgem with the powers of a genuine consumer champion, not just a regulator in name. That is what fighting the corner of working people looks like.
Let me say something about the people who power this country. I speak at industry conferences regularly and I always talk about my pride in the North sea, not as a Minister reading from a brief, but as someone who has friends and family who work offshore and as a Scottish MP who knows more than many about what the sector means. It is about people right now doing skilled, dangerous and vital work—work that this country has depended on for decades, and which does not get taken for granted—[Interruption.] We are not taking it for granted, actually; that is just nonsense.
The question in front of us is how we secure those people’s long-term future. The answer is not, as some on the Opposition Benches have suggested, to pretend that the North sea is not a maturing basin in natural decline. It is not about nostalgia for some new age of discovery. We are neither a “turn off the taps” nor a “drill every last drop” party. Neither is a credible plan. We will introduce transitional energy certificates, as industry has called for, to enable tiebacks and manage existing fields for their lifespan; for the first time, we will give the North Sea Transition Authority a statutory responsibility to consider workers, communities and supply chains; and we will launch a new North sea jobs service to support people through every stage of the transition. This energy transition only works if we bring people with us on what we are building next, and that is already taking shape.
Michael Shanks
I do not have time; I am sorry.
That system is already taking shape, whether through nuclear engineers in Ynys Môn following in their parents’ footsteps, apprentices learning to weld in the Aberdeen energy transition zone or wind turbine blades being forged in Hull—tens of thousands of jobs, record investment, real communities, real wages and a real future. The North sea made Britain an energy nation; the Bill ensures that it will remain one.
Sometimes, in the noise of this place, we lose sight of what is actually at stake. Half of Britain’s recessions since the 1970s were caused by fossil fuel shocks—not bad luck, not acts of God, but the predictable, repeated consequence of building our future on an energy source that we can never have control over. What we have heard today is that Opposition parties have not only chosen to ignore what is going on all around us, but they actively want us to go even further, to risk even more and to gamble with the futures of every single one of our constituents. The warning signs were there in 1973, in 1979 and in 2022, and they were ignored. The warning signs are back now, and it is right that we learn the right lessons.
Just a few weeks ago, 98% of our electricity came from clean sources. It was for a small period of time—I recognise that—but 98% of our electricity came from low-carbon sources. This country, when it commits to something, is capable of achieving extraordinary things. This is not ideology; it is the most basic duty of Government to protect the people of this country from dangers that we can see coming. The energy Bills contained in the King’s Speech are the path to a stronger future for Britain: energy security that no blockade can threaten; warm homes for families who have gone cold for far too long; good jobs in communities that have faced deindustrialisation for decades because of Governments who just did not care about industrial strategy; and a climate that we can hand to our children without shame. I commend the King’s Speech to the House.
Question put, That the amendment be made.