Gas and Electricity Costs

Wendy Chamberlain Excerpts

Tuesday 18th January 2022 Westminster Hall

[Jamie Stone]

My highland colleague makes a sage and wise point. [Interruption.]—with all due reference to my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael).

The figure that I have outlined compares with 24% of households living in poverty in the rest of Scotland, which is still a high figure. I believe that fuel poverty is a clear priority issue for remote rural constituencies but, overall, I would suggest that is an unacceptable blight across society.

[Wendy Chamberlain (North East Fife) (LD)]

My hon. Friend has talked eloquently about the hardship of fuel poverty experienced in rural Scotland, and particularly in the highlands. I want to talk about disabled people, who are also disproportionately suffering as a result of the energy crisis. They have higher energy costs because of the equipment that they often need for assisted living. Just living from day to day is simply more expensive for them, so does my hon. Friend agree that the Government should be putting in place additional support—similar to the warm home discount—for families of disabled children and for disabled people of working age?

[Jamie Stone]

My hon. Friend must be clairvoyant, because she has anticipated a point that I shall make in due course. I thank her for her intervention.

There are two major contributory factors to fuel poverty in Caithness, Sutherland and Easter Ross: the absence of mains gas supply to many properties, and the comparative price of electricity, which costs four to five times more than mains gas and domestic oil per unit. Both of these power sources are often used to heat things that we rely on—for instance, water. Rural and remote households are more exposed to rising household costs due to paying an extra premium.

I suggest that energy policy in the UK is fundamentally broken. Consider this: the highlands and islands, to which the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) referred, produce more than 300% of their electricity demand from renewable sources—we produce three times more than we use. We export the rest to other parts of the UK, but as the hon. Member pointed out, a highland or island household pays more per unit of electricity due to the transmission charging regime, which pushes up energy bills even further. This is fundamentally wrong. Root and branch reform is required to design a UK energy policy that is fit for the 21st century, and that, most importantly, puts consumers at its heart.

Turning to business, energy price hikes are having a serious impact on the viability of businesses in the far north and, indeed, across the UK. I will quote two examples. Sitting at the back of the Public Gallery, I witness today Mr Andrew Mackay, my constituent. He and his brother own three hotels in Caithness known as the Caithness Collection—excellent hotels. They are facing an annual increase in electricity costs from almost £77,000 to—can Members believe?—nearly £130,000, which is a 70% rise.

Also in Caithness, we have a local engineering company, JGC Engineering, which is owned by the Campbell family and makes excellent pieces of stainless steel for the nuclear and other industries. The company’s annual electricity bill runs into six figures. The owners have been forced—they had no choice; it was the best deal they could get—to sign a deal that, believe it or not, means an 80% increase in costs starting in March 2022. To enable sustainable economic growth and—to borrow an expression from Her Majesty’s Government—to level up the United Kingdom, it is imperative that measures are put in place to protect consumers and businesses from crippling energy costs.

Looking ahead at the UK’s future energy mix, it is crucial that investment in renewables is kept up to pace. However, I believe that the Government can also look seriously at novel solutions to age-old problems. In terms of nuclear power, small modular reactors, such as those being designed by Rolls-Royce, could provide districts with heating and electricity in areas where it is costly to receive utilities on the national grid.

This kind of out-of-the-box thinking could reduce the cost of gas and electricity, reduce reliance on fossil fuels, and ensure the economic future of areas that consider themselves left behind, such as Caithness.