Oral Answers to Questions

Michael Shanks Excerpts

Tuesday 6th January 2026 Commons Chamber

[Richard Foord (Honiton and Sidmouth) (LD)]

1. What steps he is taking to help the transition away from fossil fuels.

[The Minister for Energy (Michael Shanks)]

Happy new year to you, Mr Speaker, and to colleagues across the House. I have temporarily lost hearing in one of my ears so if I am shouting or do not hear every detail of the questions, I apologise in advance.

This Government are determined to strengthen our energy security by moving away from volatile fossil fuels and delivering a clean power system. We have switched off the last coal power station in the UK and have consented enough clean power to power the equivalent of 7.5 million homes. That is how we will tackle the climate crisis, strengthen our energy security and create good jobs across the country.

[Richard Foord]

The International Renewable Energy Agency reports that in 2024, China installed five times more renewable power than Europe and eight times more renewable power than the United States. In the same year, more than two thirds of our liquid natural gas in the UK came from the United States. In the difficult geopolitical situation we find ourselves in, how are the Government making the UK more self-sufficient for our energy supply?

[Michael Shanks]

It is a hugely important question. In an increasingly uncertain world, our energy security becomes more and more important, and that is why we are determined not only that we build a clean power system to tackle the most existential crisis that the planet faces—the climate crisis—but that we have home-grown power here in the UK that we control; that is hugely important. Every step we are taking to invest in renewable energy and a new generation of nuclear helps us to do that, but it is also, of course, the economic opportunity of the century, which delivers our energy security and jobs at the same time.

[Mr Speaker]

I call the Chair of the Energy Security and Net Zero Committee.

[Bill Esterson (Sefton Central) (Lab)]

Happy new year, Mr Speaker.

I hope that the Minister, in his new year’s resolutions, will commit to building the case for the energy transition through lower consumer bills, secure jobs, public health improvements through reduced emissions, and indeed energy security. Does he agree that those who oppose climate action are denying our children and grandchildren a future? Will he endeavour to make the case also to fight against the misinformation, disinformation and outright myths peddled by some Opposition Members?

[Michael Shanks]

Typically, my hon. Friend is right on these points, and yes, it is one of my new year’s resolutions—and I suspect one of my ministerial colleagues’ resolutions as well—for us to redouble our efforts to make the case for this. Just this morning I was reading about yet another study that shows that we underestimate the level of support in the general public for climate action. We have to remember that while there is a lot of noise around this at the moment, the reality is that the public back action on the climate, and it is the right thing to do not just for future generations, as my hon. Friend rightly says, but for our energy security and for good jobs.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

Refined hydrocarbon fuels are excluded from the Government’s carbon border adjustment mechanism, meaning that although UK refineries face emissions trading scheme costs of £50 per tonne, overseas fuel producers do not. That is clearly incomprehensibly damaging in economic terms and is self-evidently counterproductive when it comes to climate goals. In terms of energy security, it is pure madness. Refining at Grangemouth and Prax Lindsey are two early casualties of Labour’s failure to understand basic economics. Will the Government now act to protect the four remaining refineries in GB, or will Labour continue with its policy of deindustrialisation dressed up as decarbonisation?

[Michael Shanks]

Well, I say a happy new year to the hon. Gentleman, as we see his sunny disposition back in this House again!

First, we committed in the Budget to looking at the CBAM inclusion and are working to make that happen. Secondly, of course I have been working with all the refineries to make sure that they are as sustainable as possible. Thirdly, I think the hon. Member has an absolute cheek to come here and talk about deindustrialisation when his party has failed to have an industrial strategy in Scotland for the 18 years it has been in power and when, just before Christmas, it published the flimsiest of flimsy plans for energy security in Scotland, which was mostly made up of pictures and not by any detail. His party has absolutely no credibility on these issues whatsoever.

[Mr Speaker]

I call the Chair of the Environmental Audit Committee.

[Michael Shanks]

My hon. Friend raises a hugely important point. The future of the grid is going to be absolutely critical not only to how we get clean power to homes and businesses across the country to bring down bills, but to how we deliver the economic growth the country needs. That is why we have taken two key actions, the first of which is to build the grid we need for the future. That has been opposed by some Opposition Members, but it is critical that we build that future grid. Secondly, we are clearing out the connections queue so that there is space for more projects, like the ones he mentions, to join. Both those actions are critical, and those who oppose the building of new grid infrastructure oppose the exact economic opportunities that my hon. Friend has mentioned.

[Richard Tice (Boston and Skegness) (Reform)]

Could the Minister explain why the Government have rejected a higher bid for the Lindsey oil refinery that would have kept jobs, kept the refinery open and attracted more investment in favour of a lower bid that is destroying jobs, is mothballing the refinery and is against the growth interests that the Government profess? Can he also confirm whether or not the taxpayer is retaining the decommissioning liabilities of the oil refinery?

[Michael Shanks]

First, on a positive note in the new year, I believe the hon. Gentleman had some good news over Christmas—I congratulate him on it. He is quite wrong, though, on his question. I should set out, as I did in my oral statement on the Lindsey oil refinery, that this was an insolvency process and it was therefore for the official receiver to conclude the sales process, which it has done. It has taken the highest bid that was on the table. P66 will now take forward the future of that site in a sustainable way and I will continue to work with it on that question. The Government do not retain decommissioning liabilities; they were part of the deal and P66 will take them along with the site.

[Dr Jeevun Sandher (Loughborough) (Lab)]

Happy new year, Mr Speaker.

We are facing an affordability crisis in this country, and indeed across high-income nations, because of our dependence on fossil fuels. That is why energy prices here have risen by 40% since 2021. Our constituents feel that this is damaging our country and, more importantly, it is damaging the faith that people across this nation have in our democracy to deliver for them. Can the Minister set out how our transition to fossil fuels will help to resolve the affordability crisis and restore faith in this place?

[Michael Shanks]

That is an important question on two fronts. My hon. Friend rightly mentioned that the transition away from fossil fuels is hugely important for our energy security and for future generations. We in this place have a huge responsibility to safeguard the future of our planet for the generations still to come. His second point was, rightly, that we need to make the case for why this is important now. It is about how we get away from the volatility of fossil fuel prices, which so many of our constituents are still paying the price for, and how we industrialise communities right across the country. Tens of thousands of jobs have been created through the renewables that are already in place and we want to see hundreds of thousands of jobs by building much more of this infrastructure in the UK; that is how we get an economic advantage as well as energy security.

[Mr Speaker]

I call the shadow Minister.

[Harriet Cross (Gordon and Buchan) (Con)]

In the consultation paper on the future of the North sea, the Government defined windfall prices as $90 a barrel for oil and 90p a therm for gas. Can the Minister tell me the prices of oil and gas today?

[Michael Shanks]

We have been really clear that the energy profits levy comes to an end in 2030. We have also put in place what the future of that scheme looks like to provide certainty for the long-term future. Of course, the energy profits levy was introduced by the hon. Lady’s party in government. We have been really clear that the energy profits levy comes to an end in 2030 unless the price floor is triggered in the meantime. If the Conservatives are in favour of scrapping the levy, they also have to say where the billions of pounds that it generates will come from in order to fund the public services that our constituents rely on.

[Harriet Cross]

Either the Minister does not know the current price or he does not want to tell us. Oil today is $62 a barrel and gas 72p a therm—up to a third lower than what the Government themselves define as windfall prices. Despite that, they are still punishing our oil and gas industry with massive windfall taxes. The cost is 1,000 jobs lost every month, production set to halve in the next four years and almost complete dependence on foreign imports of oil and gas by 2030. This Government are going to be responsible for the death of one of our most important industries. Will the Government now end the oil and gas supertax, scrap the mad ban on new licences and finally back the North sea?

[Michael Shanks]

There are a number of points that I would challenge in the hon. Lady’s question. First, the floor was set by the Conservative party in government and we have not changed it. Secondly, she talks about thousands of jobs lost every month. That is from an important study that was done by a university; it is not a reflection of what has actually happened in the last few months. Although I absolutely take seriously modelling like this, I think we do need to base it in the reality of what has actually happened. Every single job that is lost is of course hugely distressing for communities, but the hon. Lady should talk up the opportunities in the North sea. She says that we are talking down the North sea—in fact, it is her party that repeatedly talks down the opportunities for the future of the North sea in carbon capture and storage, hydrogen, oil and gas decommissioning work, and much, much more. She should talk up those opportunities and be ambitious for the future of the North sea, not talk it down.

[Dr Danny Chambers (Winchester) (LD)]

2. What recent discussions he has had with Cabinet colleagues on the potential merits of supporting businesses with the cost of energy.

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[Freddie van Mierlo (Henley and Thame) (LD)]

4. What steps he is taking to reduce the impact of power cuts on rural areas.

[The Minister for Energy (Michael Shanks)]

Energy resilience is one of my top priorities and I understand the particular challenge in rural communities, which see more frequent power disruption. We work with industry and with Ofgem to ensure that sufficient investment is made into the rural power networks and that support is provided when power cuts occur. I thank all the engineers and support staff who work in difficult circumstances to reconnect communities when power failure does occur.

[Freddie van Mierlo]

With the increased frequency of stormy weather as a result of climate change, the rural communities I know are sadly all too familiar with long periods without power. What are the Government doing to ensure that older and more vulnerable residents get the support that they need during cuts? Will the Minister commit to delivering a strategic plan to improve the resilience of rural power networks?

[Michael Shanks]

We review lessons learned after every significant power failure, particularly after storms. There was a significant review after Storm Arwen in 2022, but after every storm we look at whether there are any areas in which we can improve. I regularly meet the Energy Networks Association, which does much of the work with the distribution network operators to ensure that welfare provisions, in particular, are provided as quickly and efficiently as possible. There is much more we can do, but one of the fundamental things is to invest in the future of the grid, which means building grid infrastructure and improving existing infrastructure. Members across the House have to support that grid infrastructure if they want to see as resilient a grid as possible across the country.

[Chris Vince (Harlow) (Lab/Co-op)]

Nazeing in my constituency is home to many rural businesses, including—as I mentioned before recess—the Lea Valley Growers Association. It has said to me that the biggest challenges it faces are the considerable increase in the cost of energy and energy security, so how does the Minister think the British industrial competitiveness scheme can support rural businesses in my constituency, and the Nazeing growers in particular?

[Michael Shanks]

I thank my hon. Friend for his question, and I congratulate the businesses in his constituency on doing such a good job. We are determined to bring down the cost of energy for households and businesses across the country. Schemes such as the one he has mentioned demonstrate our commitment to doing that, but the Chancellor also announced in the Budget that households right across the country will have £150 coming off their bill as a result of the decisions that this Government have made to tackle the cost of living crisis. We are determined to support businesses to do the same, and of course in the long term we will reduce the bills of businesses, industry and households by removing gas from the system and delivering the clean power system that will help all of us to have energy security and cheaper bills.

[Perran Moon (Camborne and Redruth) (Lab)]

5. What assessment he has made of the potential impact of reducing energy bills by £150 on family finances.

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[The Minister for Energy (Michael Shanks)]

Network companies have benefited in the past, but Ofgem has moved to correct that in the RIIO-3 price control period so that it cannot happen again. We are working with Ofgem every single day to ensure that we bear down on the costs of energy and that consumers benefit from cheaper bills as quickly as possible.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

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[Alex Mayer (Dunstable and Leighton Buzzard) (Lab)]

T7.   AW Group in my constituency has two wind turbines and a solar array, which are creating what I think of as great Bedfordshire energy, but currently it gets muddled in with all the other energy in the area and the company cannot have its own local tariff. Will the Minister consider community energy projects being able to sell direct to local consumers?

[Michael Shanks]

That is exactly the work we are looking at as part of the local power plan. As my hon. Friend points out, we are determined to unlock much more community-owned energy, to make it as easy as possible for communities to connect to the grid, and for these projects to deliver not just clean energy, but real social and economic benefits for communities. We will publish the local power plan very soon.

[Olly Glover (Didcot and Wantage) (LD)]

T9. Space Solar, based on Harwell campus in my Oxfordshire constituency, plans to deliver commercial space-based solar energy by 2032. Given what we have heard today about the Government’s commitment to artificial intelligence growth zones and the very high cost of industrial electricity, does the Secretary of State recognise the potential of space-based solar, and will he support British excellence and leadership in this emerging field?

[Michael Shanks]

We are genuinely excited about any new technologies that come forward, so we are very interested in innovation like that. We need a real mix of technologies to achieve our target, so I am very happy to find out more about that. I am just trying to work out whether I can somehow get a visit to space to see these projects.

[Rachael Maskell (York Central) (Lab/Co-op)]

We are really excited about the University of York’s work to develop deep geothermal heat, and we believe that greater cost efficiencies can be achieved by sequencing projects, especially when it comes to hiring the drilling rig and equipment. How are the Government driving efficiencies in deep geothermal heat, so that future developments, such as that in York Central, are more viable?

[Michael Shanks]

I was delighted to meet my hon. Friend recently to talk about this exciting project in York and the wider developments that go alongside it. We see huge potential from geothermal. As she rightly says, how we structure these projects is important if we are to take them forward as quickly as possible. My noble Friend Lord Whitehead has a particular focus on geothermal, and I am sure that he will be very happy to meet my hon. Friend.

[Sarah Olney (Richmond Park) (LD)]

Mr Speaker,

“We owe it to future generations not just to have good environmental principles but to act on them. That is why I will be voting against the third runway at Heathrow”—

not my words, but the words of the Secretary of State in 2018. Given that Heathrow is already the biggest single source of carbon emissions in the UK, and that expansion will add an extra 8 to 9 megatonnes of carbon dioxide into our atmosphere, can the Secretary of State confirm that it is still his intention to vote against a third runway at Heathrow?

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[Dr Luke Evans (Hinckley and Bosworth) (Con)]

In Hinckley and Burbage, if you look one way, you can see the rooftops of lots of logistics businesses, because we are the heart of the logistics sector; looking the other way, to Barlestone and Nailstone, you see agricultural land that has been turned into solar farms. My constituents rightly ask why we cannot have more solar panels on commercial properties. What conversations is the Department having with the Ministry of Housing, Communities and Local Government to ensure that that is a possibility?

[Michael Shanks]

The hon. Gentleman is right: we should have many, many more solar panels on rooftops. We agree with him on that. I met the UK Warehousing Association recently to look at some of the technical difficulties around ownership and insurance. We want to do whatever we can to unlock the potential, because we have rooftops across the country that can play a huge part in helping us to achieve our clean power mission.

[Tom Hayes (Bournemouth East) (Lab)]

Once the political situation is stabilised in Venezuela and foreign companies can be enticed to invest somewhere between £100 billion and £200 billion there, it will take emergency repairs, workforce modernisation and retraining and many more things to get the infrastructure and industry in Venezuela up to historical peak capacity. That could take up until 2040. Is it not easier and speedier for the UK to invest in home-grown renewables and nuclear, so that we can guarantee energy independence, and get off the fossil fuel rollercoaster—

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[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?

[Michael Shanks]

My hon. Friend is absolutely right. We need a mix of technologies to achieve our clean power targets, and rooftops are an obvious place to use. I think there is broad consensus about how much we can use rooftops, even from those who disagree with other measures. GBE has invested to bring down bills for public institutions, including schools and hospitals, but we want to see much more solar on car parks and warehouses—everywhere we can possibly have it.

[Caroline Voaden (South Devon) (LD)]

Happy new year, Mr Speaker. This weekend, 4,600 properties in my constituency had their gas supply cut off, on the coldest weekend of the year. I commend Wales & West Utilities, which worked tirelessly to get people reconnected, but its efforts have been hampered by the inability to communicate effectively with residents, as it does not have a direct relationship with its customers. It has had to rely on social media, which is not great in an area with lots of elderly people. We have also been hampered by the high number of second homes, as engineers have not been able to gain access to those properties. Will the Minister meet me to discuss how providers such as Wales & West Utilities can communicate with households—

[Michael Shanks]

I thank the hon. Lady for engaging with me over the weekend on this issue. I am genuinely sorry that there are still so many customers who are not connected. The engineers are doing a fantastic job, but as she rightly says, the challenge is that they cannot reconnect until households are present to disconnect. That is causing significant problems, but they are doing everything they can. I am very happy to discuss this further.

[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?