Off-grid Homes: Energy Support

James Cartlidge Excerpts

Wednesday 19th October 2022 Westminster Hall

[The Minister for Climate (Graham Stuart)]

It is a great pleasure and privilege to serve under your chairmanship, Mrs Murray—for the first time, I think. I congratulate my hon. Friend the Member for Brecon and Radnorshire (Fay Jones) on securing the debate. We can see how motivated rural colleagues are across the House; we have the Liberal Democrats here, we have Plaid Cymru, the SNP, the SDLP and of course a large mass of Conservative Members. It is pretty shocking, given the importance and topicality of the issue, that His Majesty’s Opposition did not even bother to turn up. I thank everyone else for doing so, and for taking this issue seriously.

Colleagues will know that I have long been involved in this issue. My constituency has a lot of people who are off grid; I have spent a lot of time fighting the inequities of Government systems of support, which too often are shaped around urban needs and ignore or try to fit the rural into some urban pattern. That does not work, and too often the system, under successive Governments, has failed properly to recognise the needs of rural areas that, because of their natural grittiness, put up with it more than they should.

[James Cartlidge (South Suffolk) (Con)]

I welcome the Minister to his position, and congratulate my hon. Friend the Member for Brecon and Radnorshire (Fay Jones) on a brilliant debate. The Minister talked about the equity between off grid and those who have access to the grid. For people in South Suffolk on heating oil who have contacted me, one of the key issues is that it is not regulated; there is no cap and so on. Is it not the case that in practice that may be difficult because of the size of the producers, and therefore the issue is competition? Can he assure us that he keeps the competitiveness of the market under review? The worry I have is that as it gets tougher, we get more agglomeration, and that is how we get higher prices in the long run.

[Graham Stuart]

As ever, my hon. Friend is absolutely right, and has gone to the heart of the issue. The Government recognise and understand the pressures that people are facing with the cost of living. This is a deeply worrying time for many of our constituents, and we will continue to listen to their concerns, which have been well expressed by many colleagues today.

Wholesale energy prices have been rising due to global pressures, and the UK is hardly alone in feeling the pinch. It is important to recognise how significantly this Government have stepped in. Back in May, £37 billion of support was announced, which altogether means that the most vulnerable households are receiving £1,200 a year—£100 a month—before we get to the energy price guarantee and the alternative fuel payments. It is important to put that on the record. There is a lot of support for all of our more vulnerable and rural constituents. The hare that is running—and this has been repeated by my hon. Friend the Member for Brecon and Radnorshire today—is that it is inequitable. On the face of it, that £100 intuitively does not feel right. However, I will take colleagues through the numbers and explain why there is equity, while also recognising the issue of monitoring. That is important, and the Government are going to monitor the situation going forward.

Heating oil prices have risen more than prices for other alternative fuels such as coal, biomass and others. The Government have picked a point in time; we looked at what the situation was going into winter last year and compared it with this year—then we have sought to provide protection. We have looked at the numbers for September last year to September this year. LPG, coal and biomass have risen less than heating oil. The average price of heating oil in September 2021 was 40.6p per litre in Great Britain. A year later, that average price is 100.3p. For those colleagues who have talked about a 60% rise, it actually comes to a 147% rise. The average use of heating oil over a year is 1,514 litres; that used to cost £615, but has gone up to £1,415. That has a serious impact on those with the least. I have already talked through the £37 billion package. The difference in the current bill is around £100—that has been the rise.

The cost of heating for the average on-grid home would have increased by approximately 220% in that same year to October. The energy price guarantee lowers that increase, through unparalleled Government intervention to support people, which I think we can be proud of and should do a better job of trumpeting. Over the same period the price of heating oil rose by 150%. It has been dampened by the EPG for on-grid homes to 130%. Probably due to market competition and lack of Government intervention—I am not saying that that is the only explanation—heating oil rose by 150%. That is where the £100 comes in. I beg colleagues on all side of the House to stop the hare running; there is comparable support. I can say that as someone with many oil-heated and LPG homes in my constituency; it is comparable.

The question is about going forward—what if prices spike? That is why, quite rightly, colleagues have pressed me and the Government to monitor the situation and to be prepared to intervene if necessary. I cannot pledge precisely that that intervention would happen, but we are going to monitor the situation with a view to being able to intervene if necessary and maintain the equity that I assure colleagues is in place.