Oil and Gas Producers: Windfall Tax

Hilary Benn Excerpts

Tuesday 1st February 2022 Commons Chamber

[Hilary Benn (Leeds Central) (Lab)]

We are facing two energy crises. The first is the one that is right in front of us. In opening the debate, my right hon. Friend the Member for Doncaster North (Edward Miliband) made a powerful case for action to help people. I would say to the Minister, were he still in his place, that he may have felt that his speech got him through this afternoon, but it is not going to get the Government through to the end of April, because I think we all know that the Government are going to have to do something. They are going to have to raise funds. We have a plan; we have debated it today. The Government do not have a plan, but they will have to come up with one.

In Leeds, fuel poverty is rising, and is now up to 57,000 households. We can trade statistics, but in each of those households, a debate takes place. Parents have to make decisions that they do not want to have to face. We heard about the choice between heating and eating, or between buying clothes for their children and heating or eating, and about people going up to a complete stranger and saying, “I know we have never met, but can you help to feed my family this weekend, because I cannot”, which takes a lot of courage. This is happening in the sixth richest country in the world.

The second crisis is also coming, because we know we will have to change the way in which we heat our homes in order to meet the net zero challenge. Since we are talking about home heating, what about the 23 million homes that currently have gas boilers? All of those will eventually have to go, because we will not be able to use gas any more. What will replace them? There are two basic choices, as we know: heat pumps or electric boilers on the one hand, and possibly heating our homes with hydrogen on the other. There is a lot to be worked through to make this work.

But how will we pay for that change? How will my constituents, our constituents, pay for that change? This is really important. As we touched on earlier, the transition to net zero has to be just and fair, and people have to be able to deal with the costs involved. Back in October, the Government announced plans for £5,000 grants to help install heat pumps in homes. In so far as it goes—not very far—I welcome that, but under that plan, only 90,000 homes will be eligible. Given that the Government’s target is to install 600,000 heat pumps per year later this decade, that is clearly nowhere near enough. I hope, of course, as do the Government, that in time the cost of alternative forms of heating will fall, and I hope that the technology will develop.

However, to go back to the start of the debate, we are already concerned about the ability of our constituents to pay the bill today, never mind the bill in April. How on earth will so many of our constituents be able to afford to make that change? A heat pump can cost between £5,000 and £15,000. We think hydrogen boilers will be cheaper, but we do not yet know whether that technology will work; I hope it does. At the moment, there is no way in which many of our constituents will be able to afford that transition. The Government, as well as needing a plan for April, will have to come forward with a plan for the next 10, 15 and 20 years to make that happen. It has to be a plan that can be afforded by the nation and by our constituents. We do not have a lot of time for it to appear.