Energy Prices Bill

Debate between Jacob Rees-Mogg and Ed Miliband

2nd reading
Monday 17th October 2022 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

Thank you, Madam Deputy Speaker. I will try to be as brief as I can to let as many people as possible speak in this debate.

Let me start by saying that Labour called for support for families and businesses in August through an energy price freeze, so we will support the passage of the Bill. I thank the Secretary of State for the conversations we have had on the Bill. This is an incredibly serious issue for families and businesses across the country.

I have to say, before I get into the detail, what a shambles this Government are. We are debating what they describe as their landmark Bill for a two-year price guarantee. It was published only last Wednesday and it has already been shredded by the Chancellor this morning. Last Wednesday, Members were in the House for Prime Minister’s questions. The Prime Minister went on and on about her decisive action of a two-year guarantee. She even derided the Opposition’s approach of a six-month freeze, seeking to spread to fear about what would happen in March, and now the Government have adopted our proposal. Never mind a vision; never mind a plan for the years ahead—this Government cannot even give us a plan for the coming week. They are truly in office but not in power. This matters, because families and businesses need to be able to plan.

I want to talk about the substantive action in the Bill and the way that the revenue to pay for it is raised, because there are important issues for the House. On the substantive action, there is a contrast with our six-month package. That was a real freeze, not a rise in bills, and £129 for millions of families across the country is significant. That even takes account of the £400. I worry about off-grid households, which we will talk about in Committee. I understand the basis of the Secretary of State’s argument. Our costed package provided £1,000 to help off-grid households. The Bill provides just a tenth of the support, and even with the Government’s measures, the University of York estimates that more than 10 million families will be in fuel poverty, so we will want to debate those issues during the Bill’s passage.

I will focus my remarks on the second set of issues relating to the way that funding for the Bill is provided, which is important. Our argument five weeks ago, when the Government announced their energy price guarantee, was that they should do everything they could to find some of the money for this intervention from the energy companies that are making enormous profits. Anyone who heard the Business Secretary’s dulcet tones on the radio last week will have heard him say that there is no windfall tax in the Bill. The right hon. Member for Wokingham (John Redwood) described it as a “surrogate windfall tax”, which is a new invention. However, page 3 of the Bill’s explanatory notes states:

“The Bill aims to do the following…Require certain generators currently receiving supernormal revenues to make a payment to a third party…for purposes of lowering the cost of electricity for consumers, or to meet expenditure incurred by the Secretary of State”.

Payments on the basis of windfalls received to lower the cost of electricity for consumers, or to meet expenditure incurred by the Secretary of State—it sounds like a windfall tax. It works like a windfall tax. It talks like a windfall tax. It is a windfall tax.

I want to hear during this debate that the Government will definitely use the powers to have a windfall tax that are in clause 16. That matters, because while we set out a clear plan for a windfall tax, the truth is that the Government, having resisted a windfall tax tooth and nail, have now taken the broadest and most ill-defined powers imaginable. Companies and the public have no idea from the Bill about the size of the levy, how much it will raise and how there will be fairness with the fossil fuel windfall tax that the previous Chancellor announced —to remind the House, that was four Chancellors ago, in May this year.

We will probe two issues that go to the question of whether we will raise sufficient resources from the windfall tax, or “surrogate windfall tax”, in the Bill. First, according to their press release, the Government will start the windfall tax on electricity generators only in 2023. Those months of delay matter, because it will mean billions in extraordinary profits being left—[Interruption.] I do not know why the Secretary of State is shaking his head. This is a very important point: that will leave billions of pounds of extraordinary profits with the companies, and it means that the British people will be forced to foot billions more of the bill for energy price support. If having a windfall tax is the right thing to do, why not have it from the date of the intervention in September? I am very happy to give way to the right hon. Gentleman so he can explain why he is not doing that.

[Mr Rees-Mogg]

I am very happy to explain. The right hon. Gentleman knows perfectly well that the energy companies have sold their electricity forward, and therefore the profit is not accruing on the prices at which they have sold it forward.

[Edward Miliband]

That would mean that there are no windfalls, so why is the Secretary of State having a special payment made by the energy companies anyway? That makes no sense at all. We will definitely want to probe that during the debate. How can it possibly all have been sold forward, as he says? So he is saying that the energy companies are currently making no windfalls. That does rather prompt the question: why are they going to have to make special payments, if it has all been sold forward and they are making no windfall profits?

Secondly, I want to talk about the question of the level playing field in what is happening to the fossil fuel companies and to the electricity generators. The previous Chancellor but one—I think that is right—introduced a super-deduction for fossil fuel companies as part of his windfall tax. That means that for every pound invested in oil and gas and fracking, companies get 91p back. But to be clear: that is not available to renewables, nuclear or other zero-carbon technology. That is an absurd tilting of the playing field towards fossil fuels and against investments in cheap, home-grown, clean power, and that is absolutely indefensible. It will not reduce bills. We will want to use the Bill as best we can, given the constraints of its scope, to debate the merits of that provision. I urge the House to support attempts to eliminate that preposterous loophole.

In the time I have left, let me deal with the wider questions about the Bill. We will continue to be in this position unless we learn the proper lessons from this crisis. Those lessons are not some extreme fringe idea that fracking, which will not lower bills, is somehow the answer to the problems that we face. The answer is a clean sprint for clean energy—for solar, wind, nuclear as part of that and energy efficiency all together.

The other day, the Secretary of State wrote an article in The Guardian, in which he said, “Dear Guardian reader”:

“I can assure Guardian readers that I am not a ‘green energy sceptic’.”

Let him prove it. He is for fracking, which will not lower bills and is dangerous. His colleague, the Secretary of State for Environment, Food and Rural Affairs, is seeking to block solar energy worth 34 GW—the equivalent of 10 nuclear power stations. That is not some whim of the DEFRA Secretary, but an instruction from the Prime Minister, who said that she does not like the look of solar panels. If the Business Secretary wants to convince people that he understands the stakes and what is necessary to get out of this crisis, he needs to make a proper sprint for green energy.

The other thing that the Business Secretary needs to do—we will again discuss this during the passage of the Bill, and I think he may agree with this—is set a timetable for the proper de-linking of electricity and gas prices. We suggest that we should set a two-year timetable in the Bill for that to happen.

Let me end by saying that the Bill is necessary, because we need support to be put on the statute book, but the truth about the Government is that they are lurching from U-turn to U-turn, and they cannot provide the country with the strategic direction that it needs to get out of the crisis. The truth is that, day by day, they are showing that they are out of ideas, out of time, and now, in the national interest, they should be out of power, too.

Shale Gas Extraction

Debate between Jacob Rees-Mogg and Ed Miliband

Thursday 22nd September 2022 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy to make a statement regarding the lifting of the moratorium on shale gas extraction.

[The Secretary of State for Business, Energy and Industrial Strategy (Mr Jacob Rees-Mogg)]

What a pleasure it is to be continuing on this theme—

--- Later in debate ---

[Mr Rees-Mogg]

I am very grateful to the right hon. Gentleman for asking his urgent question. I am glad to be able to announce that the moratorium on the extraction of shale gas is being lifted, and a statement about that has been laid before the House.

As I set out in the previous urgent question, it is important that we use all available sources of fuel within this country. It is more environmentally friendly to use our own sources of fuel than to extract them in other countries and transport them here at great cost, both financially and in terms of carbon. It is therefore something we need to revisit, and we need to revisit the seismic limits to ensure that shale gas extraction can be done in an effective and efficient way.

[Edward Miliband]

This is obviously a case of “the dog ate my homework”, and it is hardly surprising. Let us start by taking the Secretary of State’s excuse for lifting the fracking ban—that it will make a difference to the energy bills crisis. It will not, because gas is sold on the international market. The current Chancellor said so in February of this year:

“No amount of shale gas…would be enough to lower the European price”

of gas. In an article published yesterday, even the founder of Cuadrilla said that the Secretary of State is wrong. First, why does he not admit the truth that anyone who knows anything about this subject says his claim that fracking will cut bills is nonsense?

Next, let us come to safety. The 2019 manifesto, on which the Secretary of State and every Conservative Member stood, said:

“We will not support fracking unless the science shows categorically that it can be done safely.”

They are lifting the ban, but they cannot supply the evidence, and the British Geological Survey report published today certainly does not do it. So in the absence of the evidence, his approach is to change the safety limits. He says in his written statement laid before this House that

“tolerating a higher degree of risk and disturbance appears to us to be in the national interest”.

I look forward to him and his colleagues explaining his charter for earthquakes to the people of Lancashire, Yorkshire, the midlands, Sussex, Dorset and, indeed, Somerset who will be part of his dangerous experiment. Let me tell the Conservatives that we will hang this broken promise round their necks in every part of the country between now and the next general election.

The Conservative manifesto also said:

“Having listened to local communities, we have ruled out changes to the planning system.”

Does the Secretary of State stand by that promise, and how will he abide by the Prime Minister’s commitment to local consent? The truth is that he does not understand that we cannot escape a fossil fuels crisis by doubling down on fossil fuels. Renewables are today nine times cheaper than gas. The only way to cut energy bills and have energy security is with zero-carbon home-grown power, including onshore wind and solar, which his wing of the Conservative party hates and he continues to block. For communities in every part of our country, today shows that they can never trust a word this Government say again, and he has shown he is willing to break his promises to support dangerous fringe ideas that put the interests of fossil fuel companies above those of the British people.

[Mr Rees-Mogg]

There was plenty of energy in that, Mr Speaker, but it was, I am afraid, more sound and fury that signifies nothing. We know that shale gas is safe. It is safe in the United States, where it has been one of the biggest contributors to the decline in carbon emissions of any activity that has gone on in that country. We know, even if Labour Members wish to ignore it, that seismic activity of 2.5 and below on the Richter scale takes place millions of times a year across the world. Our standards for ground-level movements for construction work are double those that have ever been achieved by any shale gas exploration in this country. There is a huge margin over what we allow for building work against what has actually happened in terms of shale gas. The right hon. Gentleman seeks to deny the ordinary rules of supply and demand. He ought to be aware that when we increase supply and demand remains steady, that has an effect on pricing, and pricing is always set at the margin. The price of any commodity is set by the final user who demands that commodity. If supply exceeds demand prices fall, and any increase in supply helps to reduce costs.

But there is another point. We have—all of us— constituents with gas boilers, and we are going to have them for many years to come. Do we really want them to be dependent on strange dictatorships that wage war in this world, or do we want to have our own security, and our own supplies? Do we want to maximise what we receive from the North sea and from underneath our feet? This seems to me to be just good common sense. It is safe, it is shown to be safe, and the scare stories have been disproved time and again. The hysteria about seismic activity fails to understand that the Richter scale is a logarithmic scale. It seems to think it is a straight arithmetic scale, which of course it is not. Bringing on the supply will bring us cheaper energy, which we need, and that will help our constituents. It secures our supply, which will ensure that our businesses can continue to operate whatever the weather. This is of such importance, and it is sheer Ludditery that opposes it.

Data Protection Bill [Lords]

Debate between Jacob Rees-Mogg and Ed Miliband

3rd reading: House of Commons & Report stage: House of Commons
Wednesday 9th May 2018 Commons Chamber

[Mr Rees-Mogg]

The right hon. Gentleman mentions what David Cameron, Nick Clegg and he did. It seems to have escaped his attention that David Cameron is no longer Prime Minister, that Nick Clegg is no longer Deputy Prime Minister, and that two former MPs and one still-existing MP cannot bind their successors. A new Parliament has the right to consider these matters afresh, and that is what is rightly being done today after countless police investigations and prosecutions, many of which ended in acquittal.

[Edward Miliband]

I give way to the hon. Gentleman’s constitutional knowledge, but I do not give way to him on morality—and this is a question of morality and of promises we made. Remember the furore about all these events? Remember how people looked at us? Remember how all of us—Labour Governments too—were too close to the press, and how we said we would learn lessons? I take my responsibility too. We should have acted earlier. All Governments should take responsibility. To break this promise would be contemptible.

Debate on the Address

Debate between Jacob Rees-Mogg and Ed Miliband

Wednesday 4th June 2014 Commons Chamber

[Edward Miliband]

Here we have it: the country wants answers to deeply serious questions, and what do the Government do? They get every Tory Back Bencher to read out a planted Whip’s question. I have to say it: no wonder the public hate politics, given the way Government Members behave.

The first thing this Queen’s Speech needed to do was signal a new direction in the jobs we create in this country and whether hard work pays, and it did not rise to the challenge.

[Jacob Rees-Mogg (North East Somerset) (Con)]

I am very grateful to the right hon. Gentleman for giving way to the question that I have obviously been given by the Chief Whip. In his opening and thoughtful part of his speech he called for a different form of politics, but as soon as he gets on to the detail it is business as usual and he criticises us for doing the same. May we go back to his first speechwriter, who was actually giving us something rather interesting?

[Edward Miliband]

I say to the hon. Gentleman that the man who called for a pact with UKIP clearly has great confidence in the prospects of the Conservative party and its ability to win the election.

Let me come to the child care Bill. We support measures on child care, which is part of the cost of living crisis, although the scale of that challenge means that we could go further on free places for three and four-year-olds. We also support the Bill on pensions, although we want to ensure that people get proper advice to avoid the mis-selling scandals of the past.

The next task for this Queen’s Speech is to face up to another truth: for the first time since the second world war, many parents fear that their children will have a worse life than they do. No wonder people think that politics does not have the answers when that is the reality they confront, and nowhere is that more important than on the issue of housing. We all know the importance of that to provide security to families, and we know that it matters for the durability of our recovery too. The Bank of England has warned that the failure to build homes is its biggest worry, and that generational challenge has not been met for 30 years.

Debate on the Address

Debate between Jacob Rees-Mogg and Ed Miliband

Wednesday 8th May 2013 Commons Chamber

[Edward Miliband]

It is all very well having a Whips’ question, but the Government are borrowing £245 billion more. Three years, no growth, a flatlining economy—that is the record of this Chancellor.

[Jacob Rees-Mogg (North East Somerset) (Con)]

I am extremely grateful to the right hon. Gentleman for giving way. He said we have borrowed more, but will he answer in the House the question he would not answer on Radio 4—how much more will he borrow?

[Edward Miliband]

This Government are borrowing more. Of course a temporary cut in VAT has a cost and would lead to a temporary rise in borrowing—[Interruption.] Let me say this: that would get growth moving in this country and would be much more likely to get the deficit down. That is the difference. The International Monetary Fund is in town, and what is it telling the Chancellor? It is saying, “Change course. Your plan is not working.” That is the reality.

I am glad that the hon. Member for North East Somerset (Jacob Rees-Mogg) intervened because I will come to his point later in my speech. He advocates not just a pact with UKIP but a coalition—Deputy Prime Minister Farage in place of the Liberal Democrat leader.