UK Energy Costs

Baroness Winterton of Doncaster Excerpts

Thursday 8th September 2022 Commons Chamber

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. Just before we move on, I say to Members that there is absolutely no problem with there being interventions. However, I would advise sticking to the three minutes, because not everybody is necessarily going to get in. Interventions mean that the speaker gets an extra minute, and that means an extra minute off somebody else. Please do take interventions, but I would really appreciate it if colleagues then stuck to the three minutes.

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[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

Some of the announcements are welcome, particularly the focus on people who are not on the grid. I would like to highlight to the Government Front Benchers—I hope they will go away and seek more clarity on this—the people who resell energy. They are often landlords in blocks who buy the energy on the commercial market and resell it to their tenants. The Government have never explicitly mentioned that. They have talked about heat networks, which is if the landlord is running a boiler, but not about landlords they are supplying the electricity directly to a flat. Those meters are not on the official meter grid and they will not even be eligible for the £400 support from the Government unless action is taken. There needs to be some urgent action to ensure that landlords can purchase at fair prices and that they pass them on. At the moment, the landlord has to pass the cost on at the purchase price. I am not saying that landlords are gouging, but there is a problem that the purchase price is a commercial price, not a residential price. I hope the Government will come back with clarity on that.

The reality is that this package is still a £500 increase on what energy bills are today. This is not a reduction; it is an increase. It did not need to be like this. We could have regulated the wholesale market price, and the Government could have stepped in and offered loans to energy companies to bridge the gap for the gas they are importing. That could have been the offer, with the debt put on the energy companies and not the state, but that is not what has been put forward. The Government could have fixed energy prices at what they are today and made interventions, but we have not seen that either. Therefore, there are real difficulties relating to who pays. Does this come from the profits of the companies or is it done on the backs of the people? I am afraid that the wrong choice has been made, because future generations, and even this generation in future years, will pay for this policy. That does not seem right.

Improvements of efficiencies were mentioned slightly but not enough. We need a house-to-house, street-by-street approach to insulation—as my constituency neighbour, the hon. Member for Brighton, Pavilion (Caroline Lucas), has called for—to get this right. Leaving it to the market does not work. We will not get the efficiencies of scale. Labour has put forward a plan to start that process, but even more ambition is needed.

We also need to look at the production of wind energy not just offshore, but onshore, and having solar panels on our roofs. At the moment, the solar panel feed-in tariff is less than the cost of buying energy directly from the market. That does not work; we need to reverse it. We need to give people the incentive to pay into the grid at a fair market price—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order.

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[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. May I just point out that if Members speak for less than three minutes, we will get more of them in? I call Imran Hussain.

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[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call Virginia Crosbie, but let me emphasise again that if everybody spoke for just two minutes, we would have a much better chance of getting everybody in.

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[Mike Wood (Dudley South) (Con)]

The speed and scale of the support announced by the Prime Minister is hugely welcome and, obviously, hugely necessary for the many households that simply could not have afforded energy bills of £3,500. Together with the £400 payments to each household, the £650 to those on low incomes and the £300 to pensioner households, it will make a real difference. I hope that we can have some clarification on the position of those residential properties that are on commercial meters, perhaps because they were converted from commercial businesses.

The support will also make a real difference to many businesses, whether they are energy-intensive businesses, such as those in ceramics and glassmaking in my constituency, or whether they are in hospitality. Similarly, perhaps we can have further clarification on the position for those businesses that have recently had to enter into new contracts. Will they still be able to switch to the new price cap or the support that has been announced?

Let me deal with the criticisms that have been made. There is some superficial political attraction to extending the windfall tax—of course, we already have a windfall tax set at 25% on top of the 40% tax already paid by British oil and gas producers. The attraction is more superficial and political than real and effective, because the revenue that an extension would raise would be small in comparison with the cost of the necessary support. It would affect less than half of the oil and gas we use in the UK, because that is what is produced in the UK. Making UK oil and gas production less competitive will, in the medium and long term, reduce our energy security at the worst possible time. That is something that we cannot afford.

It has also been suggested that the package will affect price signals. As a reformed economist, I know that economists can sometimes dwell a bit too much on good theory and ignore the real world, but I find it hard to credit that people would be less careful with their energy when the price cap is at £2,500 than they would be if it were £1,000 higher. Clearly there would be a huge impact if energy were free, but we are already at a level at which people are being very careful with what they use.

This is the right package, and it is an effective package. We need to get it into the pockets of households and businesses—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order.

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[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Felicity Buchan has one minute.

[Felicity Buchan (Kensington) (Con)]

I warmly welcome this bold, decisive and comprehensive measure, which is exactly the right thing to do. I particularly welcome the measures on communal heating networks, which are huge in my constituency with all my mansion blocks.

I like that we are focused on self-reliance. I tried to intervene on the Leader of the Opposition, because he rightly talked about self-reliance when it comes to energy, but part of the reason why we are not self-reliant is because, between 1997 and 2010, the Labour party failed to invest in renewables and other sources of energy, so our dependence on gas went from 32% to 46%.

All the measures announced today are welcome. I welcome the commitment to net zero, and I welcome the investment in renewables.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Secretary of State, Edward Miliband.

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[Mr Rees-Mogg]

I would love to give way, but time is very short.

We are fully committed to green growth and the green industrial revolution, and to net zero by 2050, but we have to get there, and to get there we are going to need oil and gas. We are therefore going to have a new oil and gas licensing round, which we hope to launch in October. I reassure the right hon. Member for East Antrim (Sammy Wilson) that we will work with communities and individuals to use shale gas as well, with the support of those who may be affected. The pause on extraction is being lifted through a written ministerial statement and will come into effect immediately. This will allow us to gather further data on seismic safety. It is fundamentally important, as any economist knows, that pricing is set at the margin. If you have more, it helps bring prices down. That is fundamental. It is not in any way contradictory to what we have said before. We will also have legislation to support people in Northern Ireland, which is fundamentally important. We must be one United Kingdom in how we do this.

I am very grateful for the many contributions that were made in the course of the debate, including by my hon. Friend the Member for Worcester (Mr Walker), my right hon. Friends the Members for Central Devon (Mel Stride), for Forest of Dean (Mr Harper) and for South Northamptonshire (Dame Andrea Leadsom), my hon. Friend the Member for Bolton West (Chris Green), my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb), my hon. Friends the Members for East Surrey (Claire Coutinho), for Watford (Dean Russell) and for Gloucester, my right hon. Friend the Member for Basingstoke (Dame Maria Miller), and my hon. Friends the Members for Ynys Môn, for Dudley South (Mike Wood) and for Sevenoaks (Laura Trott). I commend the motion on the Order Paper to the House.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Before I put the Question, I am very sorry that all right hon. and hon. Members were not able to get in to speak in the debate. It was very oversubscribed. I remind Members that it is important to get back in good time for the wind-ups in order to hear the responses to what people have said.

Question put and agreed to.

Resolved,

That this House has considered UK Energy Costs.

[Madam Deputy Speaker]

Before we move on to the next business, I wish to pass on my thoughts and best wishes, and those of the people of Doncaster Central, to Her Majesty the Queen and her family.

Social Security (Special Rules for End of Life) Bill [Lords] (Allocation of Time)

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That the following provisions shall apply to the proceedings on the Social Security (Special Rules for End of Life) Bill [Lords]—

Timetable

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