Energy Prices Bill

Lord Grantchester Excerpts

2nd reading
Wednesday 19th October 2022 Lords Chamber

[Lord Grantchester (Lab)]

This Bill comes very late in the present predicament. A poor track record of government action and wrong priorities has brought about a vulnerability to energy shocks, going back to the short-sightedness of the Cameron Government in curtailing wind and solar renewables in 2015.

I welcome the comprehensive nature of the Bill, providing support across domestic users, businesses and charities—all types of users and circumstance facing unprecedented price challenges—but, in doing so, the Bill gives vast new powers to the Secretary of State to intervene in the market. While this is emergency legislation, it is regrettable that your Lordships’ Secondary Legislation Scrutiny Committee has yet to be able to report, while the Delegated Powers Committee could concentrate on only three significant delegations of power, which seem to have been ignored from earlier reports on the delegation of functions.

That there are sunset clauses, to which other speakers have drawn attention, is less than comforting; it highlights the seriousness of the review the Government must undertake and be accountable on before introducing the next stage of measures to follow in April 2023.

As I am in the gap, I will limit my remarks to one or two issues also highlighted throughout the debate. I thank the Minister for the meeting he conducted yesterday on the Bill. In his reply, can he say something about the Government’s outlook regarding the continuation of the tariff cap legislation, pending the sunset of the tariff cap Act of 2018? The Energy Bill has now been paused for the passage of this Bill. In so far as this Bill picks up these provisions, the calls for reform of many of the tariff cap provisions and the operation of Ofgem have become issues of concern. Can the Minister outline how the emergency nature of the present situation will give way to more orderly regulation of the market? At the moment, there is no competition and no switching between suppliers as energy contracts expire, as quotes from new suppliers have ceased.

The second feature I will highlight is the discrepancy in treatment between sources of power. The upstream measures for oil and gas companies that allow the off-setting of the energy profits levy for investment are in contrast to downstream measures on renewables and their surrogate levy—reinvestment there is vital and necessary, but they have not been given equal treatment. This gives a perverse incentive to continue with fossil fuels and carbon-emitting sources of energy.

As the Bill gives powers to the Secretary of State to vary contracts retrospectively on both earlier contracts under the renewables obligation and later contracts varying the contracts for difference into cost-plus, can the Minister explain why the Government have not introduced clauses giving incentives on an even-handed basis? Why do they not review the MER—maximising economic recovery—provisions? They should prioritise the development of renewables, which is where growth will come from for the long-term future of the UK.

The supply chain of renewables and energy-efficiency measures, also vital under ECO4, cannot simply be turned on again after the way it was treated—being shut off during previous government interventions. The climate emergency and net-zero imperatives remain the long-term energy challenge.