Cost of Energy

John Hayes Excerpts

Tuesday 11th February 2025 Westminster Hall

[Joy Morrissey]

The hon. Lady makes an excellent point. The Conservatives have an excellent track record of putting in renewables. We were the first to bring in the coal-free plan to tackle energy, so that is an important way of moving forward. I would like to continue moving forward with cheaper energy bills to make sure that we protect our energy security while ensuring that costs are low for both the consumer and industry.

[Sir John Hayes (South Holland and The Deepings) (Con)]

I apologise for arriving at the debate rather late, Mr Western. Needless to say, as a former Energy Minister, I take an interest in these matters. Anyone who shares that interest will understand that we need a mix of energy between renewables and non-renewables. Renewable energy has to be tested on the basis of whether it is cost-effective. Some renewables are and some are not; it is as simple as that.

[Joy Morrissey]

My right hon. Friend makes an excellent point. Some renewables are cost-effective and some are not; and some are a lot less energy-dense than gas or nuclear.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)]

Good morning; it is a pleasure to speak in this debate under your chairmanship, Mr Western. May I thank the hon. Member for Bath (Wera Hobhouse) for securing this debate and, actually, for all our engagements over the past seven months? She always helpfully challenges the Government from a place of real passion and commitment, and I appreciate her words of wisdom, even if I do not always entirely agree with them. In fact, we have had countless debates on energy policy with a number of people in this room—it is beginning to become a bit of a weekly club here in Westminster Hall—and I appreciate all the points that have been raised.

May I say to the hon. Member for Strangford (Jim Shannon) that I just cannot get enough of his contributions? Having not spent enough time in the Commons yesterday, we are back again today, but I am appreciative none the less. I will come to his points about Northern Ireland later.

I will start where the hon. Member for Bath started: on the public’s view about the cost of energy. She made an important point about how central energy costs are not just to the cost of living crisis that our constituents are still living through, but to their belief in the Government’s ability to change things, so it is important that we tackle these issues. As the hon. Member for Beaconsfield (Joy Morrissey) rightly said, this Government were elected on a manifesto that contained pledges on energy. I am privileged to have the job of Energy Minister, because for the first time in a very long time we have a Government with a key mission to fix the energy system in this country. The truth is that it needs to be fixed because of what we inherited from the previous Government.

The energy crisis in 2022 was just the peak that highlighted how vulnerable we are to the rollercoaster of the fossil fuel markets. The cost of energy continues to have a devastating impact on our constituents and communities right across the country. Although consumers are protected to a certain degree by the energy price cap, our energy costs are determined by volatile markets outwith our control. As long as we remain exposed to that, the risk to our constituents is that we will face yet another price spike in the future.

My hon. Friend the Member for Northampton South (Mike Reader) made the point well that after 14 years of Conservative Government, we have to not just turn around one bit of the energy system, but deal with the whole series of occasions on which the previous Government failed to make decisions that would grapple with the scale of the problem. That is why I announced yesterday in the main Chamber our transitional support for Drax and biomass. The truth is that we got a good deal for consumers and for sustainability, but we had to make that decision. We had no other options because the previous Government left us with no long-term plan for energy security.

That is why we believe so firmly in our clean power by 2030 mission, which, by creating home-grown renewable energy, will help us to reduce our dependence on volatile fuel markets and will protect bill payers for good. Great British Energy will play a vital role in that mission by accelerating our deployment of clean energy so that Britain can become a clean energy superpower. Crucially, it will also invest in the supply chains that bring manufacturing jobs for renewable energy to our country.

[Sir John Hayes]

I understand the Minister’s desire to create more economic resilience by ensuring energy independence. By the way, I should refer Members to my entry in the Register of Members’ Financial Interests in respect of this contribution and the previous one. The key thing is transmission and distribution costs, which make up 15% of every energy bill. No Government have looked at that seriously. If we distribute energy production to small solar plants spread right across the kingdom, we will maximise the costs and damage the resilience that the Minister seeks. Will he focus on the concentration of energy production and bring it as close to consumption as possible?

[Michael Shanks]

I will come to the right hon. Gentleman’s point about transmission costs later, because it is important, particularly when it comes to how we grapple with constraint costs. The truth is that we will have to build more network infrastructure. I hope he will support the construction of that, although I suspect he will not. We also want to review energy market reforms to look at how we deal with some of these issues. I will come back to the important point, which a number of hon. Members raised, of how we build an energy system for the future. The question of balance is key. We do not want a renewables-only system, although renewables will be incredibly important. We announced last week our commitment to rolling out much more nuclear to provide the baseload and the security of supply. We have the ability to place small modular reactors across the country near centres of demand, such as the data centres that we will see in the future.