Heat Networks (Mark Framework) (Great Britain) Regulations 2025
Martin McCluskey Excerpts(5 days, 13 hours ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
Today I am announcing the commencement of heat network regulation.
Remaining sections of the Heat Network (Market Framework) (Great Britain) Regulations 2025, as amended, will come into effect, introducing protections for both existing and future heat network consumers as we seek to grow the sector. These protections build on the introduction of statutory advice and advocacy through Citizens Advice and Consumer Scotland and statutory redress through the Energy Ombudsman, introduced from April 2025.
Heat networks are a decentralised energy distribution technology, which circulates heating, cooling and hot water from central sources to multiple points of use. The scale of these networks can vary significantly, from single building, communal networks to multiple building district networks. Heat network consumers have not, until now, enjoyed similar regulatory protections to those in gas and electricity markets. This unregulated state has led to a large variation in consumer experiences, including limited transparency on pricing. Where there are no consistent rules on prices, supplier behaviour or technical operation, this has meant some consumers can experience unfair high prices, poor customer service and frequent outages with limited routes of redress.
That is why the Government have taken steps to regulate the market, acting on recommendations from the Competition and Markets Authority and appointing Ofgem to act as the heat network regulator. Ofgem will operate an authorisation regime, which heat networks are bound to comply with to maintain their right to operate in the market. Ofgem’s powers will enable it to collect information from heat suppliers that will help it to assess whether regulations are proportionate and to take decisive action if necessary to address regulatory non-compliance.
Existing heat networks have been automatically deemed as holding an authorisation until the end of the transitional period on 27 January 2027. These heat networks, and any heat networks that commence operation from now until the end of the transitional period, will need to submit a lighter-touch registration to Ofgem before the transitional period ends.
Ofgem authorisation conditions include rules on how prices are charged, requiring that prices are clearly explained, bills are transparent and that prices charged are fair. Once Ofgem has collected a full year’s worth of sector data, it will set benchmarks of acceptable prices for different network characteristics, which will be a basis for more systematic action to tackle examples of unfair high pricing. Ofgem will also have powers to introduce guaranteed standards of performance once market data becomes available. This will set out the standards of service that heat networks will be expected to provide to consumers, and networks will be required to pay compensation when these standards are not met. In addition, we have published a consultation on proposals for minimum mandatory technical standards to help drive improved heat networks’ efficiency and performance.
The regime that is commencing today is set out through the first comprehensive utility regulations in the heat network sector’s history. We will monitor the market closely, working with Ofgem and other statutory partners to ensure that the regulatory regime works effectively and that it is fit for the purpose of protecting heat consumers.
[HCWS1274]
Consumer Energy Bills: Government Support
Martin McCluskey Excerpts(5 days, 13 hours ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
It is a pleasure to serve under your chairship, Ms Jardine, I think for the first time. We could probably have done with a longer debate given how many people intervened at the start, but I thank the hon. Member for Sutton and Cheam (Luke Taylor) for securing this debate and for giving us the opportunity to debate an important issue, which I know lots of Members across the House have an interest in.
I associate myself with the hon. Member’s remarks about the situation in Ukraine. Last year, when I attended the G7 Energy and Environment Ministers meeting, I met the then Ukrainian Energy Minister. I was struck by the sheer scale of what she was facing every day, such as sending energy workers into the field to repair broken transmission lines and substations—not just facing the risks that any worker faces in situations with high voltage cables, but also facing the risk of Russian drone attacks and bombs. I could not be clearer in condemning the actions of the Russian regime and what they are doing in targeting infrastructure at this time.
As I draw this debate to a close, I want to reaffirm that tackling the affordability crisis is this Government’s No. 1 priority. The main reason that bills are so high, as the hon. Member for Sutton and Cheam alluded to, is the wholesale cost of gas and our exposure to price shocks caused by our dependence on fossil fuel markets. We are working to bring down, for good, the cost of energy by taking back control of our energy system through our clean energy superpower mission. Thanks to our decisions, last year was a record year for wind and solar power, and we have embarked on the biggest nuclear building programme for half a century. Already in 2026, the Government’s seventh contracts for difference auction secured an incredible 8.4 GW of new offshore wind capacity across Britain—enough to deliver energy for more than 12 million homes. That is what it means to deliver on lower bills, good jobs and energy security. I have to look at the Opposition Benches, which are empty this afternoon, and think about the work that those Members could have been doing in government over the past 14 years to take us to a position where we would have been less reliant on fossil fuels and not facing such fuel shocks. I suppose it is no surprise that they did not turn up to defend their record.
Notwithstanding the concerns voiced by hon. Members this afternoon, which I share, energy bills are starting to come down. In real terms, Ofgem’s price cap was lower in 2025 than in 2024, but we know we need to go further. The Government’s intervention at last year’s Budget will help people deal with cost of living pressures, by taking an average £150 of costs off energy bills from April 2026. By closing the ECO scheme and providing Exchequer funding to reduce the cost of the renewables obligation for domestic energy suppliers, this Government are turning a corner by putting more money in people’s pockets in 2026.
At this point, I want to address the point made by the hon. Member for Yeovil (Adam Dance), who raised the issue of an ECO project affecting one of his constituents. I ask him to send me the details of that case in writing, so that we can investigate it fully. In addition to the £150 off energy costs, we have expanded the warm home discount scheme this year, so that more households will benefit from its support. That means that up to 6 million households will receive a £150 rebate on their energy bills this winter. In Sutton and Cheam, over 2,800 households received the warm home discount last winter; we expect that to increase significantly this year. Under the expansion across London, for example, 950,000 households will benefit from the warm home discount this winter. That is money going on to people’s energy bills and bank accounts, now. I recognise how important that support is to households across Britain over the winter months. That is why we have proposed continuing the warm home discount scheme for a further five years, up to winter 2030-31.
A number of hon. Members raised the warm homes plan, and I will address some of those issues in a moment. The hon. Member for Sutton and Cheam said we needed an ambitious plan; that is precisely what the warm homes plan that we announced last week is. Reducing bills is not just about discounts, whether that is £150 off costs or the warm home discount; it is also about transforming an ageing building stock into comfortable, low-carbon homes that are cheaper to heat and fit for the future.
As my hon. Friend the Member for Manchester Rusholme (Afzal Khan) highlighted, the warm homes plan is a vital step in the Government’s mission to address the long-term issue of energy affordability in this country. It is the biggest ever public investment in home upgrades and will help millions of households benefit from solar panels, batteries, heat pumps and insulation.
The hon. Member for Chippenham (Sarah Gibson) talked about the priority afforded to different measures. I reassure her that we are not suggesting that insulation is not important. I am sure she has read the warm homes plan and will have seen the pages that deal specifically with insulation. Insulation plays an especially important part in the local government schemes we are running. With the offer of consumer loans and the work we are doing with finance organisations, there will be an opportunity to finance the retrofit of homes.
The hon. Lady highlighted how technology is changing. She talked about the electric boiler, which I have seen myself. We have been looking at lots of different technologies that could deliver and have already made changes, for example, to the boiler upgrade scheme, which is now offering heat batteries and air-to-air heat pumps as well as traditional heat pumps. We are always on the lookout for new technologies.
Sarah Gibson
I was aware that the Minister had seen the boiler I mentioned. I welcome the warm homes plan immensely, but I have a slight worry about it. There is the old saying that doing the same thing again and expecting a different outcome is a sign of madness. My hon. Friend the Member for Yeovil (Adam Dance) highlighted that the previous scheme failed to do the right things at the right time, due to a lack of scrutiny and accountability. I have not seen anything in the warm homes plan that talks of an overview to ensure that a heat pump is installed only when it needs to be, since airtightness and insulation would be more appropriate first.
Martin McCluskey
To address those points: the warm homes agency, which is part of the plan, is there to provide advice and guidance to consumers from the start to the end of the retrofit journey. That is about increasing the level of advice and guidance available. I understand that retrofitting a home is challenging and that people need advice and guidance to do it effectively, as the hon. Lady noted.
As for oversight, there has been a problem in the past, as we saw with the number of issues around the ECO4 programme. The warm homes plan states clearly that we will consult on the protection available to consumers through the course of this year. As the Minister responsible, I never want to see an issue like ECO4 again. We need to make it as easy as possible. We should ensure that problems do not occur in the first instance, but when they do there must be proper adequate redress, so that there is confidence in the system. We cannot expect people to make these changes without confidence in the system.
The warm homes plan will roll out upgrades to up to 5 million homes by 2030, saving households hundreds of pounds on energy bills and helping lift up to 1 million families out of fuel poverty by 2030. We are providing £5 billion of targeted support for low-income households, which will receive free upgrades, including heat pumps, solar panels and batteries. That includes additional funding for the very successful warm homes local grant, and the warm homes social housing fund for local authorities and social landlords to upgrade homes for those on low incomes and in social housing. Those upgrades can provide a significant saving for a typical household of £550 a year on their bills. Alongside that, we have allocated £5 billion to a new warm homes fund, almost £2 billion of which will go to the provision of low or zero-interest loans. That will make it easier for more people to meet the up-front costs of upgrading their homes in order to benefit from lower bills.
About 30% of private rented sector tenants live in fuel poverty. We are introducing new minimum energy efficiency standards for the private rented sector and the social rented sector, which will save renters hundreds of pounds a year and ensure that they have decent, warm homes. I am confident that the landmark plan that we have announced will make people across Britain better off, secure our energy independence and do right by future generations by tackling the climate crisis.
One of the effects of the affordability crisis has been to increase consumer debt, which remains at a record level. Reducing debt not only helps those in debt but cuts the cost of managing debt for all consumers. I recognise the need to tackle that problem, and I have been working closely with Ofgem to do that. In November, Ofgem published an updated debt strategy that set out its near-term actions and priorities in supporting suppliers to reduce debt in the sector. It includes proposals for a debt relief scheme to tackle the debt that some consumers built up during the energy crisis; that could reduce aggregate debt.
I commend my hon. Friend the Member for Portsmouth North (Amanda Martin) for arranging the coffee morning and the energy support event. I believe that many Members are doing similar things; they have received a lot of support from energy suppliers and other organisations. She said that she has had conversations with Checkatrade and with people in the building trade. I said a moment ago that we are ensuring high levels of consumer protection to protect not just consumers but those in the building trade. Whenever I meet them, they ask for reliable regulation and standards that they can adhere to. The vast majority of builders, who are maintaining a high standard, do not want their reputation trashed by people who are not meeting those high standards.
The energy system is changing. We have more clean power and innovative tariffs, such as time of use tariffs, and the use of technologies such as heat pumps and electric vehicles has grown. That means that we need solutions fit for 2030 and beyond. Ofgem is currently conducting a cost allocation and recovery review to look at how costs on energy bills can be recovered in the future, and it is considering factors such as efficiency, fairness, meeting our net zero commitments, ensuring growth, and how we pay for our energy system. I am keen that that ensures that progressivity is at the heart of the way people pay for their energy.
The hon. Member for Sutton and Cheam spoke about a social tariff, which I know a lot of hon. Members would welcome, but I am always thoughtful about how we make sure that is properly targeted. For that, we need reliable data. We have just launched a kick-starter project with the Department for Science, Innovation and Technology and the Department for Energy Security and Net Zero, which is about accurately finding reliable household income data and properly targeting energy interventions—I would be happy to discuss that in more detail with the hon. Gentleman. It is vital to ensuring that energy costs and bills reflect the changing market.
We are bringing energy bills down for everyone with the actions that we will be taking in April, and we will continue to search for other ways to do so. We are lowering bills through the delivery of the Budget’s bill reduction measures. We have expanded the warm home discount, and are delivering the record-breaking warm homes plan. We are working with Ofgem to future-proof how costs are managed, and are taking action to fund a cleaner, more secure energy system. We will achieve bill savings while taking back control with home-grown clean power. That is the route to cheaper energy in the long run. Every wind turbine that we turn on and every piece of new technology that we adopt helps us reduce our reliance on fossil fuels, including gas, and ensures that we get costs down in the long run. That is the only way to protect the British people and bring down bills for good. That is what the Government’s clean energy mission is all about.
Question put and agreed to.
Warm Homes Plan and Fuel Poverty Strategy
Martin McCluskey Excerpts(1 week, 4 days ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
Today, the Government are publishing the warm homes plan, alongside the fuel poverty strategy for England.
The warm homes plan—the biggest public investment in home upgrades in British history, delivering total public investment of £15 billion—will upgrade Britain’s homes to tackle the cost of living crisis and help lift 1 million households out of fuel poverty. The plan has three key pillars:
Low-income offer
At the Budget, the Chancellor took an average of £150 of costs off energy bills from April 2026, cutting the number of those needing to spend more than 10% of their income on energy bills by over a million. Building on this, the warm homes plan involves £5 billion of public investment to directly deliver home upgrades for low-income families—the biggest public investment in tackling fuel poverty in our history. Low-income households will receive, free of charge, packages of upgrades, depending on which technologies are most suitable for their homes. We are also today publishing an updated fuel poverty strategy for England, which sets out our plan to lift 1 million households out of fuel poverty by 2030.
An offer for everyone
The warm homes plan ensures that the benefits of new technologies like heat pumps, solar or batteries are available to families of every income. We are setting aside £2 billion to subsidise zero and low-interest loans for solar panels, batteries and other technologies, with a further £3 billion available for loans and investments in home upgrades over the coming years through our warm homes fund.
The Government are increasing investment in the boiler upgrade scheme every year to 2030 and supporting a wider range of technologies, including heat batteries or air-to-air heat pumps that can also cool homes in the summer. We are working with industry to simplify heat pump installation and to reduce install times. We are also launching a new warm homes agency to support consumers.
New protections for renters
There are 1.6 million children living in private accommodation who suffer from cold, damp or mould. The Government believe that if you rent a home, private or social, a landlord has a responsibility to ensure that it is safe, warm and affordable. We are introducing new measures which, by 2030, require private landlords to upgrade their properties to meet minimum standards of energy efficiency in a fair way over several years.
The warm homes plan is a landmark plan to cut energy bills for millions of families, reduce fuel poverty and create good jobs, while doing the right thing for current and future generations.
[HCWS1264]
Energy Infrastructure Planning: North Falls Offshore Wind Farm
Martin McCluskey Excerpts(2 weeks, 3 days ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
This statement concerns an application for development consent made under the Planning Act 2008 by North Falls Offshore Wind Farm Ltd for an offshore wind farm with up to 57 wind turbines and up to two offshore substation platforms, and up to one offshore converter platform, located off the East Anglian coastline in the southern North sea.
Under section 107(1) of the Planning Act 2008, the Secretary of State must make a decision on an application within three months of the receipt of the examining authority’s report unless exercising the power under section 107(3) of the Act to set a new deadline. Where a new deadline is set, the Secretary of State must make a statement to Parliament to announce it.
The statutory deadline for the decision on the North Falls Offshore Wind Farm proposed development is 28 January 2026.
I have decided to set a new statutory deadline of 28 April 2026. This is to allow time to request further information that was not available for consideration during the examination period, and to give all interested parties the opportunity to review and comment on such information. Although my preference would be not to amend the deadline, I am clear that applications for consent for energy projects submitted under the Planning Act 2008 must meet the necessary standards.
The decision to set the new deadline for this application is without prejudice to the decision on whether to grant or refuse development consent.
[HCWS1246]
Factored Energy Arrangements: Pricing
Martin McCluskey Excerpts(2 weeks, 4 days ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
It is a pleasure to serve under your chairmanship, Mr Stuart. I congratulate the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter) on securing this debate and giving Members across the House a rare and, I am sure, welcome opportunity to discuss factoring arrangements in Scotland.
The Government recognise that households in factored buildings and their equivalents face more complexity in securing the energy they need than typical households. I hope to address the six points that the hon. Member made at the end of his speech, but if there are any that he would like to discuss further with me, I will be more than happy to do so after the debate.
Factors and other property managers have an important role to play in ensuring that they secure the best-value energy contract for their building. When looking to renew their energy contracts, they should be actively comparing quotes across the non-domestic market and considering available customer service data such as Citizens Advice’s energy supplier performance league table.
Small tenements have different needs for communal area pricing from those of a large council complex, for example. Although the existing approach has generally benefited households and offered protection from unfair reselling, some households can be exposed to high prices, as we have heard from the hon. Member and others. The Government are committed to ensuring that our approach to these issues delivers the best outcomes for our citizens as our energy system evolves.
Tracy Gilbert (Edinburgh North and Leith) (Lab)
I welcome this debate and congratulate the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter) on securing it. I am grateful that the Minister recently took the time to visit my constituency and meet residents who had been battling with their factors. They manage a heat network but are all too often left without heat and hot water, which happened again over the Christmas period. My constituents were very grateful to hear the pace at which the Minister is working to put in place regulations and projects that will protect residents like them. Does he agree that we need to see action from the Scottish Government to redress the balance of power between factors, companies and residents?
Martin McCluskey
I thank my hon. Friend for all her work to advocate on behalf of her constituents—I think it was at Saltire Square in Granton, and my hon. Friend the Member for Edinburgh East and Musselburgh (Chris Murray) is doing the same with a heat network in Greendykes. At that meeting, we heard how important it is that we get on top of this. The Ofgem regulation kicks in on 27 January, and we will be looking to Ofgem to implement it as quickly as possible. I agree with my hon. Friend the Member for Edinburgh North and Leith (Tracy Gilbert) that there are more actions that other Governments across the UK can take in this space. I will turn to that point in a moment.
As I say, the Government are committed to ensuring that our approach to these issues delivers the best outcomes for our citizens as our energy system evolves. Ofgem keeps all the standard licence conditions under review to make sure that they are working in the best interests of consumers. As part of that, Ofgem will look again at standard licence condition 6 to ensure that the definitions continue to meet the needs of consumers and the evolving energy market.
Before I turn in detail to other energy policy issues, let me briefly say something about factoring as a whole. It is a devolved responsibility, and it is for the Scottish Government to make decisions relating to it. However, there is widespread interest in factoring reform in Scotland, and there is clearly an interaction between the effectiveness of the factor and our ability to provide the best deal in energy, and many other areas, for the consumer.
There is clearly a need, and there are widespread calls, for factoring reform in Scotland. There have been no major reforms to factoring since 2011, when my hon. Friend the Member for Glasgow West (Patricia Ferguson), in her time as a Member of the Scottish Parliament, took a Member’s Bill through Holyrood. The Scottish Government have recently rejected amendments to housing legislation that would have increased transparency in charging and made it far easier for homeowners to take action against factors. I believe that further work in the area would be welcomed by many across this Chamber and by tenants and homeowners in Scotland.
As we have heard from the hon. Member for Moray West, Nairn and Strathspey, when residents do not have direct control over their energy supply, access to the Energy Ombudsman depends on the specific arrangements between them and the intermediary contracting with the supplier. If residents do not have control over the party that contracts with the supplier, allowing them access to the ombudsman fundamentally changes the role and purpose of the Energy Ombudsman as a service between the supplier and the contracted customer. Ofgem is always happy to clarify where consumers are currently able to access the ombudsman, to make sure that customers are not missing out on any avenues of redress to which they are entitled, but I am happy to take away the hon. Member’s point and raise it when I next meet the Energy Ombudsman in person.
Meter profile classes, which the hon. Member also raised, are the responsibility of Elexon. Ofgem has previously clarified that, for communal supply arrangements, profile classes should not be the final determining factor in the supply type offered by suppliers. If further clarification is needed in that area, it can be explored by Ofgem and Elexon. I encourage the hon. Member to write to both of them on that point.
We are aware that not having direct control over all aspects of the supply can create difficulties for households. Where households do not have direct control over their individual supply arrangements, Ofgem’s maximum resale price rules protect them from being overcharged by limiting the price of energy charged to consumers to the price paid by those procuring the energy. The principle is that profit should not be made when reselling energy in those kinds of arrangements. The Government are very clear that resellers such as factors or landlords should not profit from the resale of energy. The maximum resale price is set at cost pass-through, meaning that the maximum price at which energy can be resold is the same as the price that the reseller paid. Many who are resold energy have limited choice over who supplies them. The maximum resale price is important, as it is the main protection against resellers exploiting their position.
The energy system has evolved significantly since the last substantive review of maximum resale price. The transition to an increasingly decentralised, digitalised and decarbonised system, driven by net zero ambitions and technological innovation, has seen new challenges and opportunities emerge. Ofgem has begun a review of the maximum resale price to determine whether it delivers fair, transparent pricing and adequate consumer protection and whether it enables investment in the low-carbon infrastructure and services necessary to deliver net zero at the lowest cost.
Ofgem has identified that enforcement mechanisms for the current maximum resale price rules are failing to protect some consumers. That is a key area of its current review, and decisions on any further action that may be needed will be made on the basis of those findings. The review started with a call for input in autumn 2025 to gather evidence, and Ofgem aims to publish a policy consultation in summer 2026. The MRP has an important role across the energy industry: as well as improving the situation for households, changes to the MRP have a potential positive impact on other areas of the energy industry.
I will like to touch briefly on the point that the hon. Member for Yeovil (Adam Dance) raised about his constituent. He may already know that we have announced regulation of third-party intermediaries. We will take that forward through upcoming legislation—this is an important point—to give people more power in brokered energy deals.
Ultimately, households in factored properties feel that their energy costs, for communal areas and otherwise, are too high—because fundamentally they are too high. As hon. Members will know, international gas prices are still 40% higher than in 2021. Permanently reducing energy prices can be achieved only by moving to home-grown, clean power that we control. That is why my Department’s central mission is to deliver a clean power system by 2030 through renewables and through new nuclear power. This is the way to break our dependence on global fossil fuel markets and permanently protect bill payers from higher prices.
The Government are determined to deliver on that mission, and my Department is leading an ambitious programme of work that will make it happen. For example, the creation of GB Energy will help us to harness clean energy; contracts for difference will continue to drive clean power investment, as we have seen from today’s announcement of allocation round 7; the results of AR7 improvements to the capacity market will ensure security of supply while maximising bill payer value for money; and network improvements, with network providers finally making significant investment after years of under-investment, will reduce the costs of operating the energy system for decades to come.
Across all fronts, the Government are taking action to drive down energy bills. Many households in factored properties will also benefit from the announcements that the Chancellor made in the autumn Budget, with action to take an average of £150 off the cost of domestic energy bills by closing the energy company obligation scheme, and providing Exchequer funding to reduce the cost of the renewables obligation for domestic energy suppliers from 1 April. Those measures are designed to provide immediate relief for people across the country and set the foundation for sustained long-term reductions in energy bills through a transition to clean home-grown power. That support, as many hon. Members will know, comes on top of the £150 off energy bills, a measure that was provided by the Government for about 6 million families and was extended—almost doubled—under the warm home discount this winter. It is cutting fuel poverty right now for those consumers who are in receipt of it.
In addition to our work on reducing energy prices, the Government are delivering record investment in upgrading our housing stock through the warm homes plan. We have committed £15 billion to making the biggest ever public investment in home upgrades, upgrading up to 5 million homes by accelerating the installation of heat pumps, solar panels, batteries and insulation. When it is announced, it will come with Barnett consequentials for the devolved Governments, including the Scottish Government, to develop their own schemes under the funding. Alongside our action to make electricity cheaper and more flexible, that is how we are delivering warmer, more affordable homes and repairing a broken energy system.
I thank hon. Members again for being present at the debate, for raising these issues and for all their contributions, which I assure them will be taken into consideration by the Government and by Ofgem as we move forward.
Question put and agreed to.
Oil Refining Sector
Martin McCluskey Excerpts(2 weeks, 4 days ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
I thank the hon. Member for Brigg and Immingham (Martin Vickers) for securing this debate. I know that he and other hon. Members, including my hon. Friend the Member for Great Grimsby and Cleethorpes (Melanie Onn), have been engaging closely on this issue with the Minister for Energy, who stands ready to continue to engage with them on the detail.
Let me start with Prax Lindsey oil refinery. It entered insolvency on 30 June 2025 because of the untenable position in which the owners left the refinery, which gave the Government very little time to act. I know how difficult the process has been for the workers, their families and the local community. The insolvency process at the refinery is led by the court-appointed official receiver, who must act independently, in accordance with his statutory duties. Since the insolvency, we have worked with the official receiver to protect workers, and to ensure the safety of the site and the security of fuel supplies. That has also allowed time for bidders to express an interest in the site and its assets.
After a thorough process to identify a buyer for the site, the official receiver has determined that Phillips 66 is the most credible bidder and can provide a viable future for the site. I am glad to say that the sale is expected to complete in the first half of 2026. As many hon. Members will be aware, Phillips 66 is an experienced and credible operator of a Humber refinery, next door to Lindsey. It already supplies fuel to the region and has consistently turned a profit in recent years. The sale allows Phillips 66 to quickly expand operations at its Humber refinery.
The company has decided not to restart stand-alone refinery operations at Lindsey. In its words, not mine,
“Due to the limitations of its scale, facilities, and capabilities, evaluations have shown that the refinery is not viable in current form.”
Although that is disappointing, it is not totally unexpected, given the long history of problems with the business. We understand that the previous owners, Total, sought to sell the refinery for several years and sold it to Prax for a nominal amount. Since Prax’s acquisition in 2021, the refinery has recorded about £75 million of losses. In addition, following a thorough assessment of offers, the official receiver confirmed that no offer was put forward that would credibly see a return to refining operations in the next few years.
Phillips 66 plans to integrate key assets into its Humber refinery operations, expanding its ability to supply fuel to UK customers from the Humber refinery. That is positive news for boosting domestic energy security, securing jobs—including hundreds of new construction jobs over the next five years—and creating future growth opportunities for renewable and traditional fuels. That being said, Ministers in the Department and I recognise that this is a very worrying time for workers, and I am glad to report that the remaining 250 directly employed workers are guaranteed employment until the end of March, although that will be cold comfort to many of them. Phillips 66 will provide further information on the number of jobs that will be retained as it moves towards completion of the sale in coming months. The Minister for Energy has asked Phillips 66 for clarity as soon as possible, and to retain as many jobs as possible. The Government will continue to support the 124 workers affected by redundancy last October.
Richard Tice
The bottom line is that P66 is mothballing the site, and will use certain bits of it for parts, rather than investing in its other site. Will the Minister allow a full, open and transparent look at alternative bids that would have kept the site open, and would have allowed us to keep many more jobs and to retain a strategic national asset?
Martin McCluskey
The hon. Gentleman will know that such discussions are commercially confidential, and the official receiver has undertaken an independent process to come to his decision.
As my hon. Friend the Member for Great Grimsby and Cleethorpes mentioned, the support for the 124 workers affected by redundancy last October includes a training guarantee to ensure that they have the skills that they need, and are supported to find long-term jobs. That goes above and beyond the usual support offered in insolvency situations. I am pleased to confirm that many —the majority—of those workers have already taken up this offer. My hon. Friend the Minister for Energy will be pleased to discuss any issues that my hon. Friend the Member for Great Grimsby and Cleethorpes thinks may emerge to do with the training guarantee.
I believe that the agreement with Phillips 66 marks the next step in securing an industrial future for the site and for the workers, who were badly let down by the former owners. The circumstances surrounding the insolvency are deeply concerning, and that is why the Energy Secretary immediately demanded that the Insolvency Service launch an investigation into the owners’ conduct and the circumstances surrounding the insolvency, which is ongoing.
Turning to issues in the broader UK oil refining sector, the UK’s refineries continue to play a vital role in maintaining reliable supplies of essential fuels that keep transport moving, industry operating and support households with their day-to-day lives. We appreciate that their contribution goes far beyond fuel alone. They are anchors for local economies, providing well-paid, skilled jobs and supporting a wide web of supply chains, which involve everything from chemicals to plastics to advanced manufacturing.
Refinery facilities also enable the production of specialist materials that many of our industries rely on. For example, the Humber refinery produces the UK’s only anode-grade petroleum coke, used in electric vehicle technology, while Fawley’s output of specialised rubber helped to ensure vaccine vials could be produced securely during the pandemic. Crucially, our refineries are also adapting for the future. They are investing in modernisation, low-carbon fuels, and technologies such as carbon capture, which are all essential to the UK’s transition to net zero. The Humber region will have a major role to play in that over the coming years. While overall fuel demand is expected to shift over time, sectors such as aviation, maritime and heavy industry will continue to depend on refined products well into the future. We want to preserve our refining sector and keep it competitive.
Melanie Onn
On the point about keeping UK oil refineries competitive, what will be the Government’s position at the European Union summit in May, in discussions on the emissions trading scheme? What will they take forward?
Martin McCluskey
I will write to my hon. Friend on that point about the carbon border adjustment mechanism and the ETS.
As was set out in the autumn Budget, we are reviewing critical policies to address the challenges that the sector faces. I will briefly go through the steps that we have already taken to help the downstream sector adapt and stay competitive. First, through the renewable transport fuel obligation and the new sustainable aviation fuel mandate, we are backing the production and use of cleaner fuels. The Humber refinery is already delivering sustainable aviation fuels at scale, and refineries at Fawley and Stanlow are benefiting from Government support through the advanced fuels fund to bring next-generation fuels to market. We are also working to de-risk investment in sustainable aviation fuel production through the revenue certainty mechanism.
Secondly, we are working closely with industry on major decarbonisation efforts, including carbon capture and hydrogen projects, within industrial clusters such as Viking and HyNet, which will be central to keeping UK manufacturing competitive as global markets tighten emissions standards. The UK ETS Authority’s decision to maintain current benchmarks for the 2027 scheme year provides the consistency and breathing room that energy-intensive industries need to plan investments and manage costs effectively.
In the autumn Budget, we committed to assessing the feasibility of including refined products in the carbon border adjustment mechanism. That is a key priority for industry, and it would help ensure that UK refineries were not undercut by imports produced to lower environmental standards. Collectively, these measures signal our determination to create the conditions for continued investment, innovation and long-term competitiveness as we transition to a low-carbon economy.
Looking ahead, the Government are deepening their engagement with the sector to ensure a smooth and secure transition in the coming years. It is important to note that Minister Shanks led the first ministerial—
Madam Deputy Speaker (Caroline Nokes)
Order. The Minister will know that we do not refer to our colleagues by their names.
Martin McCluskey
Thank you for reprimanding me, Madam Deputy Speaker. The Minister for Energy led the first ministerial roundtable with the sector for more than a decade, and will continue to engage with the industry.
In closing, let me be clear: we recognise the importance of the Lindsey oil refinery and the Lindsey site to the local community and the national economy. The integration of its assets into the Humber refinery will boost energy security and support high-quality employment locally. The UK refining sector matters, and that is why this Government are acting. From supporting low-carbon fuel production and deploying carbon capture and hydrogen, to launching a call for evidence that will shape our long-term strategy, we will work with industry, devolved Governments and the community to deliver a managed transition.
Question put and agreed to.
Energy Infrastructure Planning Projects
Martin McCluskey Excerpts(3 weeks, 4 days ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
This statement concerns an application for development consent made under the Planning Act 2008 by RWE Renewables UK Dogger Bank South (West) Ltd and RWE Renewables UK Dogger Bank South (East) Ltd for the construction and operation of an offshore wind farm, made up of two array areas (Dogger Bank South East and Dogger Bank South West). The array areas are located entirely within the Dogger Bank special area of conservation in the North sea, approximately 100 to 122 km off the North Yorkshire coast.
Under section 107(1) of the Planning Act 2008, the Secretary of State must make a decision on an application within three months of the receipt of the examining authority’s report, unless exercising the power under section 107(3) of the Act to set a new deadline. Where a new deadline is set, the Secretary of State must make a statement to Parliament to announce it.
The statutory deadline for the decision on the Dogger Bank South offshore wind farms project was 10 January 2026. I have decided to allow an extension, and to set a new deadline of 30 April 2026. This is to allow time to request further information that was not provided for consideration during the examination period, and to give all interested parties the opportunity to review and comment on such information. While it is not my preference to extend, I am clear that applications for consent for energy projects submitted under the Planning Act 2008 must meet the necessary standards.
The decision to set the new deadline for this application is without prejudice to the decision on whether to grant or refuse development consent.
[HCWS1225]
Oral Answers to Questions
Martin McCluskey Excerpts(3 weeks, 5 days ago)
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Noah Law (St Austell and Newquay) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
Happy new year to you, Mr Speaker, and to other hon. Members.
I am proud that the Labour Government have extended the warm home discount to an extra 2.7 million households, extending the total to around 6 million. The Conservatives opposed that change. It will make a vital difference to so many families this winter, including approximately an additional 220,000 households in the south-west. That is almost double the number of households supported year on year.
Noah Law
I greatly welcome these cuts to forthcoming bills. Notwithstanding those potential improvements, many of my constituents in Roche, for example, live in areas not connected to the mains gas grid, and the initial outlay associated with implementing renewable technologies can be prohibitively expensive for people. Can the scope of the warm homes plan be extended so that areas rich in geological resources but exposed to fuel poverty, such as Roche, can benefit from geothermal heat networks and significantly reduce bills on the back of those cheap renewable sources?
Martin McCluskey
My hon. Friend is a champion not just for his own constituency, but for Cornwall as a whole. We support the development of geothermal projects and recognise, in particular, the potential of geothermal heat as a low-carbon source for heat networks. We will have more to say about that in the warm homes plan, which will be published soon.
Mr Joshua Reynolds (Maidenhead) (LD)
Citizens Advice notes that the warm home discount has not kept pace with rising energy bills and will struggle to touch the sides for families in energy debt. Will the Minister therefore commit to a Government review of whether the £150 discount provides sufficient support for the families who really need it right now?
Martin McCluskey
The Government are gripped by the need to get energy bills down. That is why in April we will take £150 off the cost of energy for everyone in the country, and why we extended the warm home discount this year to 6 million households, almost doubling the previous number, and we will continue to take action to reduce bills for people across the country.
Josh Babarinde (Eastbourne) (LD)
Baggy Shanker (Derby South) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
Tackling fuel poverty is a priority for this Government. We will publish a new fuel poverty strategy for England to ensure that many more fuel-poor households are protected by 2030, at the same time as publishing the warm homes plan. We have also expanded the warm home discount to nearly 6 million households, adding approximately 2.7 million additional households to the scheme.
Baggy Shanker
Everyone deserves a warm and safe place to call home, but for the 20% of families in Derby South who live in fuel poverty this week’s cold snap is a nightmare as they struggle to heat their homes. What longer-term plans are being made so that families can see the benefits of a Labour Government and do not dread this sort of weather?
Martin McCluskey
I thank my hon. Friend for that important question. Energy prices are still far too high because of dither and delay from the Opposition when they were in government. No one should have to make the difficult choices that my hon. Friend describes. The Government are totally focused on reducing the cost of energy and making life easier for people throughout the UK. That focus includes the £150 off the cost of energy from next April—the removal of those costs from bills—and the extension of the warm home discount. We are also working with other Government Departments to improve access to data so that we can properly target support for households. We will come forward with more proposals in due course.
Dr Ellie Chowns (North Herefordshire) (Green)
Charities estimate that more than 6 million households in the UK live in fuel poverty. The Minister’s answer did not even mention the warm homes plan, but he talked about dither and delay. His Government have repeatedly postponed publication of the warm homes plan. They have cancelled previous fuel poverty programmes without replacing them with new insulation programmes. When will the Minister finally publish the warm homes plan? How many of those 6 million households in fuel poverty will benefit from it?
Martin McCluskey
It is worth waiting for the warm homes plan, which will be published very soon. Alongside that there will be an ambitious fuel poverty plan for England. The Chancellor has already announced £15 billion of funding for that. We will set it out very soon and I look forward to constructive discussions with the hon. Member when it is published.
Pippa Heylings (South Cambridgeshire) (LD)
Thank you, Mr Speaker, and happy new year.
It is freezing outside and, tragically, more than 4,000 households in my constituency are living in fuel poverty. The Government’s decision to cut the energy company obligation, which was the key mechanism for delivering home insulation and energy efficiency, without any details about what will replace it, risks pushing more families into fuel poverty. The businesses and supply chains that have fulfilled ECO contracts for more than a decade have been left in limbo. Again, we have heard no date for the plan. Will the Secretary of State or the Minister finally say when it will be released, thus ending uncertainty for businesses and the suffering of households?
Martin McCluskey
The warm homes plan will be published soon and I look forward to conversations with the hon. Member about how we roll out its ambitious measures. ECO did not target those in fuel poverty successfully enough—we spent far too much on something that did not deliver the right results. Instead, the warm homes plan will provide £1.5 billion of additional capital support, targeted at people on low incomes. That is in addition to, for example, local authority grants, which target billions of pounds at low-income households. However, I am more than happy to have further conversations with the hon. Member when the warm homes plan is published.
Mr Luke Charters (York Outer) (Lab)
Sonia Kumar (Dudley) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
My hon. Friend is right to highlight the work of the Brockmoor Energy and Environment Scheme. I met Richard Parker recently, and I hope to come and see some of these projects myself in the future. We will soon publish the warm homes plan, which will set out further plans to support such projects, but we have already allocated £1.8 billion to local authorities and social housing providers through the warm homes local grant, and the warm homes social housing fund.
Mr Peter Bedford (Mid Leicestershire) (Con)
Dr Beccy Cooper (Worthing West) (Lab)
My hometown of Worthing is already delivering a major heat network, but it is not yet designated as a heat network zone. Could the Minister please consider making this designation at the earliest possible opportunity, and ensuring that grid capacity supports early designation for advanced schemes?
Martin McCluskey
Heat networks are crucial to future decarbonisation. I would be more than happy to meet my hon. Friend to discuss that in detail.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
Pozitive Energy is a supplier to businesses in my constituency. It has provided inaccurate contracts and bills to customers, and has tried to bill them for premises that they do not occupy. It has disconnected customers from the electricity supply without notice, and fraudulently sent electricity bills for a meter that it disconnected. Now Pozitive Energy is demanding payment of the standing charge for a meter. Will the Secretary of State investigate rogue suppliers, and advise on how we will protect customers?
Martin McCluskey
If the hon. Member sends me the details, I would be more than happy to look into it. That would be a matter for Ofgem, but there is also recourse available through the Energy Ombudsman.
Alistair Strathern (Hitchin) (Lab)
I am delighted that we are investing in more rooftop solar. GB Energy supports the deployment of rooftop solar on schools and hospitals in my constituency, and the Government are taking up my proposal that it be a requirement to have it on all new housing, but how can we make sure that we are not missing out on the opportunity to use other rooftops, from those on car parks to those on commercial warehouses?
Peter Swallow (Bracknell) (Lab)
Bracknell Forest council has submitted a bid to the Heat Networks Delivery Unit for a feasibility study on a district heat network that would stretch across our town centre. Does the Minister agree that such schemes can support local businesses and residents in cutting emissions and bills?
Martin McCluskey
My hon. Friend will have heard me say earlier how important heat networks are to decarbonisation. They will play such an important role in providing energy across our country in future. I am more than happy to meet my hon. Friend to discuss that.
Lee Anderson (Ashfield) (Reform)
In November last year, the Energy Secretary and his entourage attended COP30 in Brazil. That was an event where a rainforest was chopped down so that the Energy Secretary could talk about saving rainforests. Does he understand the hypocrisy of it all?
Tim Farron (Westmorland and Lonsdale) (LD)
Some 25% of the houses in my constituency were built before 1900. They are expensive to heat and very difficult to insulate. When will there be a bespoke plan for insulating those properties, using the right materials, and, crucially, for the insulation to be installed by specialists?
Martin McCluskey
I have had very constructive conversations with the hon. Member about this. The warm homes plan will be published soon, and we will have something to say in that.
Andrew Lewin (Welwyn Hatfield) (Lab)
Happy new year to you and your team, Mr Speaker. It was a happy start to the new year, because we learned that in 2025, more renewable energy was generated in this country than at any time on record. That was driven by growth in solar in particular. Will my right hon. Friend make it a new year’s resolution that the Government will continue to drive that growth forward, and will surpass that amount in 2026?
Draft Heat Networks (Market Framework) (Great Britain) (Amendment) Regulations 2025
Martin McCluskey Excerpts(1 month, 4 weeks ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
I beg to move,
That the Committee has considered the draft Heat Networks (Market Framework) (Great Britain) (Amendment) Regulations 2025.
It is a pleasure to serve under your chairmanship, Sir Alec. Heat networks are a pivotal part of our mission to achieve net zero. They are proven to be the most affordable low carbon heat solution in high-density areas, and they can access heat from a variety of sources, including waste heat from growth sectors such as artificial intelligence, which will support energy resilience in an uncertain world. That potential has fuelled Government ambition, and by 2050 we aim to grow heat networks from the current 3% of the UK’s heat demand to 20%. For that ambition to be realised, consumers need to know that they can trust heat networks to provide safe, reliable and cost-effective heat. That starts by ensuring that the nearly half a million households that already rely on heat networks are getting the best possible levels of service.
As the Minister for Energy Consumers, I have met people who are experiencing poor customer service and frequent outages, and people who have been left frustrated by poor communication and opaque prices—most recently two weeks ago in Edinburgh. There can be no greater motivation to get on and put in place a market framework that delivers for all heat network consumers. The Energy Act 2023 provides powers for the Secretary of State to introduce regulations to apply in Great Britain. As per section 220 of the Energy Act, we have consulted Scottish Ministers on these regulations and we have their support in this matter. These regulations, as Members will know, do not apply to Northern Ireland. The Northern Ireland Executive have their own powers to introduce regulation.
In March, when this House approved the Heat Networks (Market Framework) (Great Britain) Regulations 2025, we took the first step in ensuring that consumers in a heat network will receive protections comparable to those for gas and electricity. Those regulations introduced the authorisation regime, which will work similarly to the domestic gas and electricity licensing regime and will provide heat network consumers, including the most vulnerable, with the protections they need and deserve.
From 27 January, Ofgem will have the powers to investigate and take action where heat network prices are unfair, to put in place protections from disconnection for vulnerable consumers, and to establish complaints handling processes and standards of conduct that require heat network suppliers to treat their customers fairly. That is just the start, as we seek for the first time ever to establish a regulated market framework to protect heat network consumers and support sector growth.
This statutory instrument builds on the previous statutory instrument by amending it. The amendments expand on the authorisation regime that Ofgem will implement. That includes the provision of powers to Ofgem to assist with the conduct of pricing investigations. Those powers are essential if Ofgem is to protect consumers from unfair high prices and ensure that price decisions are fully tested and transparent.
Other new requirements include the introduction of deemed contracts for households that are being supplied without an official heat supply contract in place. That will ensure that their rights are protected and they will not have their supply disrupted. Additionally, the regulations include provisions to protect consumers if a heat network becomes insolvent. A special administration regime will seek to ensure that consumers do not experience interruptions to their supply of heating and hot water in the event of a heat network operator or supplier insolvency. The statutory instrument also makes it clear that air conditioning systems will be explicitly excluded from the scope of these regulations. Those systems are different from heat networks, and we believe that including them would not be proportionate or in the interests of consumers.
The regulations include provisions to partially revoke the Heat Network (Metering and Billing) Regulations 2014. This is designed to avoid duplication in legislation, as some existing requirements and obligations on heat suppliers in the 2014 regulations will be simplified and made more user-friendly, rather than removed entirely. Finally, the regulations make changes to the scope of the ombudsman scheme. The addition of small businesses aims to align the scope for heat networks with the scheme’s application in gas and electricity markets.
Members may notice that there is a slight error in regulation 10, which would have the effect of applying a different definition for a micro-business from that in gas and electricity markets. My officials are aware of this issue, and we will ensure that this error is rectified before the authorisation regime comes into effect.
Technical standards for heat networks are a crucial element of the market framework. We have committed to mandating minimum technical standards, and we aim to consult on proposals shortly. However, those are not in scope of this statutory instrument. There will be an opportunity to discuss that in Committee in more detail at a later date when we introduce regulations.
The regulations have been informed by four public consultations dating back to February 2020, in the time of the previous Government. Feedback from those consultations has been crucial in developing the final proposals included in the earlier 2025 regulations and in these ones. The detailed Ofgem authorisation conditions are still being consulted on and will be published before the authorisation regime commences on 27 January 2026.
This statutory instrument is the culmination of years of engagement with the sector, consumers and their representatives. It seeks to introduce the final elements of the heat network market framework, providing better consumer protections and outcomes. That and the wider heat network regulatory regime represent the first big step in providing heat network consumers with equivalent protections to those in gas and electricity markets. It provides regulation proportionate to the size of Government’s ambitions for the heat network sector and its future growth.
Martin McCluskey
I am sure that, having experienced the original work on the 2023 Act, the hon. Member for West Aberdeenshire and Kincardine has a firm grip of exactly what is in here. I am pleased to have been able to relieve him of the burden of the heat network regulations by taking on this role as Minister for Energy Consumers.
On the two points that the hon. Gentleman raises, I am confident both that what we are doing with zoning—that does not apply to Scotland, as he will know—will provide more regulatory power for those who are connecting to heat networks; and that this measure and subsequent regulations will ensure that people are properly protected. I agree with his comments about unregulated, decentralised heating networks. Many Members will have heard from constituents who have experienced real detriment because of a lack of regulation in this area.
As the hon. Gentleman will know, there are more than 12,000 heat networks across the country, many of which are old legacy systems, and other regulations that we will introduce will address some of the legacy issues with older heat networks. However, I am confident that what we have laid out today will provide additional support. Obviously, there will be further detail on the SAR process, but today is about setting out the general principles. The detailed processes and procedures will be delivered through separate instruments further down the line. I hope that that provides him with the reassurance he was looking for.
With the introduction of market regulation to this sector, the Government are doing something that has never been done before. All households that are connected to a heat network, including the most vulnerable, will now enjoy statutory protections. Heat networks, as I said earlier, could play a crucial role in helping to deliver our ambitions to become a clean energy superpower. To support that, we are proposing proportionate protections for current and future heat network consumers. I commend the regulations to the Committee.
Question put and agreed to.
Budget Resolutions
Martin McCluskey Excerpts(2 months ago)
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Harriet Cross
Yes, absolutely. Many flights that take off from Aberdeen are full of workers who are leaving north-east Scotland for Norway, taking their skills and taxable income with them. Norway welcomes the opportunity for investment in its energy sources. Norway drilled more than 30 new exploration wells in its North sea this year. We drilled zero. That is not because the North sea is different on either side of the boundary line, but because of the United Kingdom’s fiscal and regulatory regime. We are banning ourselves from our own resources.
We are making it so financially unviable to get at our own resources that we are becoming more and more reliant on other countries for our energy security. That does not make sense. Even if we come at the issue from a green angle and pretend that we are helping the climate, imports are more carbon intensive. We are bringing more carbon-intensive energy, which we need, into the UK. The Government love telling us that we will need oil and gas for years to come. We will, but we will not be using UK oil and gas for years to come. We will be using oil and gas from Norway, Qatar, Mexico or America, and we will import it at a huge carbon cost, and at a huge cost to the Treasury through loss of tax, other revenue and investment.
Offshore Energies UK states that £50 billion of investment will be lost because of the EPL being kept in place. That £50 billion could go to a huge number of schools, roads or NHS projects, or it could fill any deficit that we have, but no, it is being left, because the ideology of this Government is to run down our domestic oil and gas sector.
When I am out having constituency meetings in north-east Scotland, I spend most of my time listening to people who are worried about their jobs. They are worried about when—not if—their job will be lost, and where they will get another one. There are no new jobs in the oil and gas sector. They are not being created. When a job is lost in north-east Scotland, or in any other constituency with oil and gas jobs, there are no replacement jobs. Our skilled workers are moving abroad. That expertise and those skills—the ones that will drive the transition and keep our communities together—are moving away.
One of the most cynical things that the Government did on Wednesday last week, when they chose to keep the EPL, was to release their consultation results for the future of the North sea. They thought that the people of north-east Scotland were so dim, so stupid, that they would not realise that keeping the EPL in place was going to have a destructive impact. They thought that they could wave a little flag with “North sea future plan consultation” written on it, and it would distract us, but guess what? We are not distracted. We know that it does not matter how many tie-backs are allowed, or whether we rename a licence as a certificate; that will not make any difference when it comes to how long the North sea lasts, because we do not have the fiscal regime to make it viable.
I met representatives of a large oil and gas producer on Friday—I am sure that no Government Members did, because they do not actually engage with the sector or listen to it.
Harriet Cross
Well, in that case, the Minister will have heard exactly the things that I hear from it, so why has he not acted on them? I asked the company I met on Friday what it thought about the North sea future plan paper. Its words to me were: “We didn’t need 170 pages, we just needed a fair fiscal regime.” That is all it wants. It wants the EPL to be taken away, and it needs the fiscal regime to make sense.
The EPL windfall tax was brought in when there were record prices. Last week, the Government defined “windfall” as $90 a barrel and 90p a therm, yet we have to wait until 2030 to get that. We therefore now have a windfall tax on $68-a-barrel oil and about 80p-a-therm gas. Why do we need to wait until 2030? Why are we doing that to our oil and gas sector? Why are we making sure that they are completely taxed into the ground? Why are we making investment unviable, ensuring companies move abroad and undermining our industry? We have defined what a windfall is, but we will still tax companies on windfall profits now. That does not make sense. There is no windfall. We are now taxing the oil and gas sector so much that the tax revenues are falling. The decrease in revenue from the oil and gas sector last year was 40%. Why was that? It is because investment is going abroad and production is falling. It is because it is not viable to invest in the UK any more.
A company I met last week said that it is more stable to invest in west Africa than the North sea. That is the situation that is being created by this Government. That is the issue that we see in north-east Scotland, and it is my constituents and the constituents of neighbouring MPs who are feeling the brunt. My constituents do not talk about career progression, but about career survival: “How much longer will my job last? How many more redundancy rounds will I survive?” Those are the conversations we have in north-east Scotland. That is the reality of the oil and gas sector in north-east Scotland, and that is the absolute madness of the policies that this Government are following.
Will the Government, please, for the future security of our energy, for £50 billion of investment that could come into our energy systems, and for the survival of tens of thousands of jobs, scrap the EPL? It must be scrapped. In no other sector in any other part of the country would this Government allow that many jobs to be lost, yet they are willing to do that to the energy sector in north-east Scotland, and to our oil and gas workers, and that is completely irresponsible.