Future of the Gas Grid

Nick Timothy Excerpts

Wednesday 18th June 2025 Westminster Hall

[Nick Timothy (West Suffolk) (Con)]

I am pleased to respond to this debate. I congratulate the hon. Member for Cannock Chase (Josh Newbury) on moving his motion just in time, and on his birthday. He gave an excellent speech, once he got his breath back, and I thought his warning about an overloaded electricity grid was very wise.

There was a lot of agreement in the debate. The hon. Member for Ealing Southall (Deirdre Costigan) joined the hon. Member for Cannock Chase in pointing out the prohibitive cost of heat pumps. The hon. Member for Hexham (Joe Morris) pointed out the particular challenges for rural communities. The hon. Member for Aberdeenshire North and Moray East (Seamus Logan) rightly did his duty representing that part of the country by talking about the jobs that depend on oil and gas.

The hon. Members for Strangford (Jim Shannon) and for East Londonderry (Mr Campbell), from the land of my grandmother’s birth, reminded us of the Northern Ireland experience and the importance of geography when we debate energy. That was reinforced by the hon. Member for Worcester (Tom Collins), who rightly said that we will continue to need a national gas grid, because of the nature of the demand for gas. I thought he was right to criticise the Climate Change Committee for proposing no gas for heating homes. I think the hon. Member for Peterborough (Andrew Pakes) put it well when he said that Britain runs on gas. He noted the challenge of reconciling the policy to decarbonise with maintaining fairness for families.

We must always be honest about trade-offs when we talk about policy, which is one of the things about which I will try to warn the Minister. The Government may come to regret their failure to do so on several fronts, particularly on net zero. Sadly, that is a lesson, especially on net zero, that my party has drawn from its time in office, including the unhappy end of that time.

Many businesses will continue to use gas and do not have the option to go fully electric. Half a million businesses rely on gas, and not all of them will survive the switch to electricity. As the hon. Member for Peterborough mentioned, big industries continue to rely on gas, such as chemicals, ceramics and—we have similar constituency interests—the sugar industry, among many others. Smaller businesses are just as affected. Chip shops, curry houses and many businesses I do not frequent will also face cost increases from electrification because of higher levies on their energy bills. Unfortunately, Ministers have said little to reassure those businesses that there is a plan to help them and to remember them.

This is also putting a significant cost on ordinary families. Let us look at gas boilers. I challenged the Minister on that during Energy questions last week, but the Energy Secretary and the ministerial team have refused to rule out new taxes, charges or levies on gas bills to fund lower levies on electricity bills, which means a net tax rise for the 80% of households that rely on gas. This was not even mentioned before the general election, although hon. Members will remember the promise to cut everyone’s energy bills by £300 by the end of this Parliament. Instead, energy bills have risen so far by an average of £111. While Labour sought to take the credit for the recent fall in wholesale gas prices, the policy costs for which they are responsible are rising.

Running down gas also denies how important it still is as a reliable source of power. Just this morning, a new National Gas report found an 18% increase in gas for power generation last year compared with the year before. At its peak, 65% of our power came from gas, with a half-hourly peak of 73%. This was caused partly by a major drop in wind power, which meant that we had to import more gas from countries as varied as the US, Norway, Qatar, Peru, Trinidad and other places. NESO might be planning another gas-free 30 minutes for the grid this summer, but the power of gas remains formidable and essential. People do not want to be forced to give up gas. Around 80% of the country relies on gas in some way or another. That is more than 20 million homes put at risk by any policy to force people off gas and on to less reliable and more expensive alternatives.

The Chancellor said during her statement on the spending review that

“energy security is national security.”—[Official Report, 11 June 2025; Vol. 768, c. 979.]

We agree with that, which is why the anti-gas stance of the Energy Secretary is baffling. We continue to rely on gas—in any given year, 40% of the energy used in the UK comes from it. It is a flexible and reliable source of power. It ensures that there is inertia in the grid, preventing blackouts of the kind that we recently saw in Spain and Portugal, where a lack of conventional power generation from sources such as gas contributed to mass power outages. New data centres are connecting to the gas grid to secure on-site power, instead of using wind or solar, and with good reason. But the Government want to reduce gas to below 5% of our electricity supply by 2030, and use it only as a back-up for unreliable renewables.

The Energy Secretary is being very ideological and basing decisions on dodgy claims about global fossil fuel markets. There is no single global gas market in the way that he has described on several occasions. Fossil fuel prices are higher in Europe than America, which is more dependent on fossil fuels than we are. The prices are higher here because of policy choices.

For example, blocking new oil and gas licences in the North sea only makes us more dependent on expensive, dirtier foreign imports, to the benefit of others. We are importing oil and gas from Norway from the very same seabed that we could exploit, while insisting that we are “too good” and “too green” to do that ourselves. British businesses and jobs could be benefiting from this industry, rather than being cut off. The policy does not even work on its own terms, because liquefied natural gas has four times the emissions of North sea oil and gas. As the hon. Member for Aberdeenshire North and Moray East mentioned, 120,000 jobs in the North sea are at risk. It does not make sense to shut down our own gas production when Norwegian oil and gas continues to be drilled from the North sea.

That is why I am glad that the Leader of the Opposition, my right hon. Friend the Member for North West Essex (Mrs Badenoch), announced that our party is committed to stopping the punishment of our domestic energy industry with damaging taxation. It is wrong for the energy profits levy to continue until 2030; we believe that it should be removed altogether, along with the ban on oil and gas exports. This change would actually increase revenue in the long run.

It is not just the North sea that we should worry about. Britain is the largest gas boiler manufacturer in Europe. Our gas grid is world-leading, but 130,000 gas engineers and 150,000 oil and gas sector jobs are now under threat. Deliberately winding down the gas industry is an extraordinary act of economic self-harm.

For all the Government’s talking down of fossil fuels, our gas grid is incredibly stable and resilient. The gas grid depends on over 30 large gas power stations, and the gas comes in through interconnectors, LNG imports, and from Norway and the North sea. Our gas grid is a vital connection point for the European gas supply, especially following the Ukraine invasion.

Major public investment has already gone into the gas grid to help modernise and reduce failures and leaks. This makes up 5,000 miles of steel pipes and more than 60 jet engines to move the gas around the country. Our gas grid can also play an important role in reducing carbon emissions through, for example, expanding the use of hydrogen. In contrast, the cost of decommissioning the gas grid has been estimated at between £46 billion and £70 billion.

The Government’s plans are causing major uncertainty for investors, businesses and workers when they should be standing squarely behind a critical industry that has an important role to play in our economic prosperity and energy security. Ministers are allowing policy to race ahead of the technology, threatening to destabilise the grid and our economy. It is clear that the gas grid has a crucial role to play in our energy mix if we are to protect families and businesses from rising costs. I do not doubt that the Minister will say that he agrees with that, but the test will be in action and policy, not words.