Fossil Fuels and Cost of Living Increases

Peter Grant Excerpts

Wednesday 11th January 2023 Westminster Hall

[Peter Grant (Glenrothes) (SNP)]

Like my hon. Friend the Member for Stirling (Alyn Smith), I congratulate the hon. Member on securing this debate. She is referring to the appallingly bad standard of insulation in the United Kingdom’s homes. I do not know if she is old enough, but I remember protesting as a student in the 1970s against a new nuclear power station at Torness on the east coast of Scotland. Even at that time, it was identified that if the money that it would cost to build a nuclear power station had been spent on insulating homes and buildings, the energy saved would have been significantly more than Torness could produce. Does she agree that the short-sighted, almost religious zealot-like fascination with nuclear power in the United Kingdom has been damaging our energy prospects for a great many years and has got to stop?

[Caroline Lucas]

I thank the hon. Member for his intervention, with which I agree 100%. The nuclear obsession is using vast amounts of money, diverting attention and also sending mixed signals to investors, who really do not know what kind of energy future this country is planning for itself. It is a massive white elephant. Nuclear power stations are not coming in on budget and on time anywhere, and the idea that we can now achieve that here in the UK, against all the evidence in so many other countries—and, indeed, against the evidence here at home with Hinkley, for example, which is massively over budget and massively late—beggars belief.

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[Peter Grant (Glenrothes) (SNP)]

Thank you, Sir Robert. I am pleased to begin summing up in this debate, and I commend the hon. Member for Brighton, Pavilion (Caroline Lucas) again for securing it and for her measured but still passionate and, as always, very well-informed introduction.

I have not heard very much in the debate that I disagree with. I might not entirely agree with everything said by the hon. Member for St Ives (Derek Thomas), but he used a very small and localised example to highlight what is possibly the biggest elephant in the room: if we think that we will tackle climate change and that everything else will continue in the way it always has, we are deluding ourselves. It is not going to happen. The hon. Gentleman explained how the social rented housing market is being disrupted because of steps being taken to improve the efficiency of buildings. We can argue about where we balance the various different needs—including the need to provide housing of some kind, and the need to make sure that housing is properly insulated—but we will not tackle climate change if we leave the way we do housing exactly as it is now. It is going to have to change. We will not tackle climate change if we continue with the transport provision that we have now. Far too many of us—me included—feel that we cannot do our job without flying regularly, but that will have to change.

The first thing that the Government have to do on climate change, which they have failed to do almost since the phrase was first used, is to start being honest with people and say, “Tackling climate change will hurt. It is not going to be easy, and it is not going to be cheap, but the alternative is even worse.” Far too often, the Government and their colleagues in the Opposition in Scotland seem to want to make people believe that there is a dead easy, quick-fix way out of everything—“If we vote for Brexit, everything will be great”; “If we vote for one Prime Minister after another, everything will be great”; “If we could just stop the boats coming across the channel, there will be plenty of jobs and money for all the people already here.” None of that is true. None of the significant issues that the Government have to face up to have quick and easy solutions. The Government need to start being honest with people and say, “If we are going to be serious about addressing climate change and fixing an energy market that is not fit for purpose, it will not be easy or comfortable.” It will be extremely uncomfortable for some of their pals in the City of London, and that is maybe where they need to start focusing their attention.

I represent a constituency that was one of the most important economic drivers of the United Kingdom and, indeed, the empire—to our eternal shame. It was one of the most important coalmining constituencies in the United Kingdom. Methil docks used to be one of the biggest coal exporting ports anywhere in the world. That is all gone. A lot of the traditions and heritage that went with coalmining are still there, but coal has not been dug out the ground in Fife for many decades. The constituency also played a major part in the oil and gas industry. The fabrication yard, known as RGC in those days, was a major source of the infrastructure for North sea oil and gas.

Both of those energy booms created billionaires by today’s standards. Very little of the benefit stayed in my constituency. We would not need to spend much time walking through places like Methil and Buckhaven to realise that the economic benefits of the oil and gas boom and the coal boom went elsewhere. The benefits certainly did not stay with the people who lived, worked and, in too many cases, lost their lives to make those industries effective. However we change the way we do energy in these four nations, we need to ensure that the benefits that come from being an energy-rich nation go to the people. I do not just mean a few directors in boardrooms; I mean the people who actually helped to produce that massive wealth.

The crisis we are facing has not just happened because Putin invaded Ukraine last year or because he invaded Ukraine in 2014—although perhaps if the UK and their allies had not turned the other way in 2014 and had stood up to Putin then, the most recent invasion might not have happened. The energy crisis and the cost of living crisis are a result of decades of long-term failure. It is now creating a day-by-day crisis. People are freezing in their homes today, so we cannot wait 25 years to come up with a strategy to fix that. There needs to be significantly more emergency help going to people now. We need long-overdue recognition that our entire energy system—from the way energy is produced, distributed and supplied to the way the price is controlled, or not—is not fit for purpose. None of it is working to the benefit of our constituents. It is not working for the people who rely on it most and the people who cannot afford 100% or 150% increases in their fuel bills.

Once this—I hope—short-term crisis has been addressed, we need to start looking at what we can do to change the energy market so that this can never happen again. Why is it that in a country such as Scotland, which produces 85% of its electricity need without gas, the change in gas prices has such a disastrous impact on electricity prices in Scotland, when very few of my constituents use electricity that has ever been anywhere near a gas field? Why is it that in a country such as Scotland, which exports more gas than it imports, when the price of gas goes up, our people get poorer? That does not make sense. It does not make economic sense, and it certainly cannot be morally or ethically defended.

Since 1990, the Scottish Government have delivered a reduction of well over 50% in our CO₂ emissions. We are more than halfway towards net zero. Clearly, the second half of the journey will be more difficult. They are doing that by accepting, and they formally accepted this in an announcement made over the past day or two, that oil and gas are not the future. There is now a presumption in Scotland against any further exploration or development of oil and gas facilities. There are still significant potential economic reserves under the North sea, but the Scottish Government have taken the decision that the price to the planet of exploiting those reserves is just too high. It does not take a genius to work out that that is not an easy thing for the Scottish Government to say. It has not been an easy decision to take, and it will not be universally popular in Scotland, but it is the kind of hard decision that we have to be prepared to take. We have to be prepared to say that there are times when the economic benefit or certainly the short-term economic benefit, of exploiting those oil and gas reserves will be outweighed by the longer-term damage that that does to the planet and, ultimately, by the longer-term economic harm that that causes.

I will give an indication of how severe the energy crisis has been in Scotland. Between 1 and 18 December last year, the Scottish Ambulance Service answered 800 999 calls from people with hypothermia. Eight hundred people in Scotland were admitted to hospital because they were literally freezing to death. That is in a country that has more energy than it needs. How can it be allowed to happen? How can it possibly be justifiable? I will put that figure of 800 people into context. At the moment, and as in England, Scotland is seeing probably the highest levels, or certainly among the highest levels, of covid hospitalisations that we have had, almost at any time, and exceptionally high levels of hospitalisation with influenza. About 1,600 or 1,700 people in Scotland are in hospital with either flu or covid; and in the space of 18 days, we sent another 800 people in because they were freezing to death. That is the extent to which the climate crisis, the energy crisis, is putting additional pressure on an NHS that does not need additional pressure put on it. As well as the sheer inhumanity of allowing people to get to a stage where they are in danger of freezing to death in their own homes, there is a knock-on impact on public services that are already under enormous pressure.

I can predict what the Minister will say. I can certainly predict what he came into this Chamber intending to say; I do not know whether he will have changed his answer after listening to any of the arguments made today. The Government will blame the Russian invasion of Ukraine. Yes, that has had an impact, but it has not had as big an impact as the Government might try to pretend. The United Kingdom does not depend on Russian oil or gas to anything like the extent that some other countries do, and those other countries are not faring any worse than we are.

The Minister might well throw the barb that was very popular on the Tory Benches towards the end of last year—that this is all the SNP’s fault because we will not allow any more nuclear power stations in Scotland. But apart from the fact that if we started planning and building a nuclear power station today, it would not help the 800 people who were hospitalised in December, or the 800 who might be hospitalised later this month if there is another cold snap, the Scottish Government’s opposition to nuclear power is because of two facts. In Scotland, we do not need it; and it is by far the most expensive form of energy that this country or these four countries have ever used.

Therefore, I hope that the Minister will not demonstrate what I think the hon. Member for Brighton, Pavilion described as the previous “obsession” with nuclear power. Nuclear power has never been the answer. It is certainly not the answer now. As I mentioned in an intervention, there have been times when it has been shown that if, rather than building a nuclear power station, we had spent the money insulating people’s homes, we would have got more energy out of it. That is not sexy, and it does not make anyone look clever in the eyes of the United States if they can say that they have the best insulated homes anywhere in the world, but economically it makes a lot more sense than building nuclear power stations. At the moment, we still literally do not know how much it will cost to decommission the ones that we already have, so why on earth would we start to build any new ones?

I congratulate the hon. Member for Brighton, Pavilion on initiating this debate. A great deal more could be said on this issue. I have no doubt that on a different day, or possibly if we had been able to get time in the main Chamber, a lot more Members would have wanted to speak. My single request to the Minister, and the message that needs to go back to the Government about the issue, is this: start being honest with people about where the energy crisis has come from, because if we are not honest about what has caused the crisis, we will never get any closer to finding answers to it. I do not want to see another 800 people in Scotland at risk of freezing to death next time there is a cold snap. But at the same time, when I move on from here, I want there to be a world left that is fit for all our families and all our constituents’ families to continue to inhabit for a hundred years to come. If we continue going the way we are just now, that cannot be guaranteed.

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[Graham Stuart]

I thank the hon. Lady. The cost of living crisis is because of the global position on the price of gas, driven by supply and demand, as every market is. She speaks as if there is a switch, and a wilful failure by people in my position to press the button that ends all fossil fuel. We hear careless suggestions—“From your friends in the City of London to your friends in the oil and gas industry”—as if there is some button we have not pressed. That is not true. This economy, like every developed economy, is dependent on fossil fuels, and it is a transition to get out of that. Pretending it is not does not serve those people who are suffering as the hon. Lady said.

The Government are driving a reduction in our demand for fossil fuels, and we have achieved a lot on our road to net zero already. Between 1990 and 2019 we grew the economy by 76% yet cut our emissions by 44%, decarbonising faster than any other G7 economy. But oil and gas will remain an important part of our energy mix, and that needs to be recognised. People should not suggest that there is some button that we are wilfully failing to press. We cannot switch off fossil fuels overnight and expect to have a functioning country. If we do not have a functioning country, we will have more people who cannot afford to heat their homes properly. That is the reality, and I do not think that has been properly reflected by Opposition Members today.

Supporting our domestic oil and gas sector is not incompatible with our efforts on decarbonisation when we know that we will need oil and gas for decades to come. What is laughable is to suggest that it is somehow morally superior to burn liquid natural gas imported from foreign countries, with much higher emissions around its transportation and production, than gas produced here. Why would we want to do that?

[Peter Grant]

rose—

[Graham Stuart]

There are 120,000 jobs, most of them in Scotland, dependent on oil and gas. I was delighted to witness the signing of a memorandum of understanding with three major oil and gas companies looking to decarbonise their operations west of Shetland and bring down their production emissions. Emissions from oil and gas production in this country—remember how fast it is waning—are still around 4% of our overall emissions. The idea is to incentivise companies that are massively taxed to invest in electrification of their production. We need oil and gas for decades to come. If we can, we should produce it here rather than import it from somewhere else, and we should incentivise and ensure that production here is as green as possible. That is why it is not incompatible.

[Peter Grant]

rose—

[Graham Stuart]

We are a net importer of oil and gas, and we will continue to be. New licences simply help us manage a fast declining basin. Even with new licences, the production is falling by around 7% a year, and I think the IEA suggested that it needs to fall by 3% to 4% globally.

It is a bizarre argument made by the Scottish nationalist party. The hon. Member for Glenrothes is right to say that it is not popular. It is not popular in Scotland because it is insane. It does not make any sense for us to import oil and gas, because we are going to be burning it. There is no button to stop us burning it. If we are going to keep burning it, we should burn oil and gas that we produce here if we can, and we should incentivise our producers here to operate to the highest environmental standards. That is the right thing to do morally, for the environment and economically, and it makes sense. That is why the SNP’s policies, as re-announced this morning, are so completely out of kilter with reality.

[Peter Grant]

I am grateful to the Minister for finally giving way. I tactfully point out him that that he has seriously misrepresented the position of those of us on this side of the debate. Nobody is suggesting that we should turn off oil and gas production immediately. What we are saying is that we have to stop the headlong, insane rush towards more and more oil and gas production.

I also remind the Minister that his country is a big importer of energy and my country is a big exporter of energy. On that point, will he answer this question? How is it that a country that has more gas than it needs—a country that is an exporter of an increasingly scarce, and therefore increasingly valuable, natural commodity—is becoming poorer when something that we have an excess of has become more valuable?

[Graham Stuart]

As we know, the price of oil and gas has gone up, and hopefully it will go down again and become more affordable. Scotland is an integral part of this United Kingdom, which is why the hon. Gentleman is present in this United Kingdom Parliament. That is why we are in it together. That is how we are able to support Scottish households and families through the power of the Exchequer and the Treasury of this country, which, as he knows, provide much higher levels of public expenditure and support the Scottish nationalist party to take credit for every single penny spent, a large part of which is able to be spent only because of Scotland’s participation in this United Kingdom. We are in this together.

Hon. Members raised the idea that oil and gas firms are being subsidised, but we have raised the level of tax. I think £400 billion has come so far from the oil and gas companies. They are not being subsidised when we encourage them—