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Energy Update
05 September 2022
Lead MP
Greg Hands
Debate Type
Ministerial Statement
Tags
UkraineEconomyTaxationClimateEnergy
Other Contributors: 47
At a Glance
Greg Hands raised concerns about energy update in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Government Statement
The Government recognises the severe concern among households and businesses due to high energy costs, exacerbated by Vladimir Putin's invasion of Ukraine. Ofgem has raised the default tariff cap level from £1,971 to £3,549 for a typical household as of October 1st. This represents an increase of about £1,600 annually compared to current levels and around £2,300 above last winter's prices. The Government has introduced a £37 billion package aimed at supporting those most affected by these price hikes, including a £400 energy bill support scheme for around 29 million households. Additional targeted measures include payments of £650 to over 8 million households on means-tested benefits and a £150 disability cost-of-living payment for six million households receiving disability support. The Government is also investing heavily in renewable energy, with plans to increase nuclear power capacity through projects like Sizewell C, which could supply electricity to six million homes. The Government has launched Great British Nuclear and is considering measures such as increasing the renewable obligation exemption to 100%.
Alan Whitehead
Lab
Glenrothes
Question
Does the Minister accept that there is an urgent need to protect UK consumers and businesses from rising energy costs due to Russia's decision to cut off Nord Stream 1? What measures are the Government undertaking in response?
Minister reply
The Minister acknowledges the urgency of protecting UK consumers and businesses but does not provide specific details on additional protective measures beyond those already announced.
Alan Whitehead
Lab
Glenrothes
Question
Does the Government plan to freeze energy prices or implement a further windfall tax on oil and gas giants making record profits due to the energy crisis?
Minister reply
The Minister does not commit to freezing energy prices or implementing an additional windfall tax, citing ongoing discussions with stakeholders and preparations for a new Prime Minister's plans.
Alan Whitehead
Lab
Glenrothes
Question
Does the Government intend to decouple electricity prices from gas prices immediately and remove its ban on onshore wind?
Minister reply
The Minister does not commit to immediate decoupling of electricity prices from gas prices or removing the ban on onshore wind, citing a need for consultations and long-term energy market design reviews.
Alan Whitehead
Lab
Glenrothes
Question
I thank the Minister for his statement and for the brief advance notice that we had. I think that we can all agree that this is a statement of astonishing vagueness and complacency... Does he accept that this announcement today puts an even greater sense of urgency on the need to protect the price of gas from outside the UK, both for businesses and for domestic customers, and what measures are the Government undertaking to make that happen?
Minister reply
I thank the hon. Gentleman for his engagement... He is right that this has an impact on prices, however, and that is being discussed at the moment and I would expect to hear more from the new Prime Minister and her team in the coming days.
Alan Whitehead
Lab
Glenrothes
Question
Does he think that the Government should freeze energy prices... Is he prepared to commit to decoupling the price of electricity from the price of gas now, particularly given the weight that renewables now have in the market?
Minister reply
Again, I do not want to speculate on what might happen, but I will say what happened when Labour last proposed a windfall tax... There is no change as yet in Government policy on fracking, but that will obviously be a matter for the soon-to-be new Prime Minister.
Desmond Swayne
Con
New Forest West
Question
The Minister said that the rise in price was a result of the attack on Ukraine. It is much more than that: it is a deliberate part of the attack on Ukraine. Is not the essential ingredient of any scheme that the Government bring forward that it encourages customers to reduce their consumption?
Minister reply
My right hon. Friend of course makes a very strong point about Russia’s deliberate weaponisation of energy in this conflict, which we wholly deplore and our international partners also very strongly deplore... My job is to make sure that we have the energy supply that this country needs, and I am confident in our energy supply and the energy security measures we already have in place.
Alan Brown
SNP
Central Ayrshire
Question
The MP welcomes the Minister's acknowledgment of insufficient current proposals for energy security and net zero but criticises the lack of updated investment in renewables, Rough gas storage facility, decoupling of renewables from gas, grid upgrades, and acknowledges 6.5 million households are in fuel poverty with an expected increase to 9 million if the energy cap increases as planned. He questions the Minister's red line for acceptable fuel poverty numbers and seeks clarification on tax cuts proposed by the incoming Prime Minister and their impact on low-paid workers. He also queries Hinkley Point C's budget overruns and delays, Sizewell C's estimated construction costs of £63 billion, and requests an updated estimate from the Nuclear Decommissioning Authority for nuclear clean-up costs. Finally, he calls for a freeze in the energy cap and urgent support for businesses as well as a review of budget allocations to councils and devolved governments.
Minister reply
The Minister commends Alan Brown's ability to raise multiple issues and emphasises ongoing investment in renewables through annual allocation rounds and contracts for difference. He notes fuel poverty is a devolved matter and suggests the SNP should address Scottish Government policies on this issue. On nuclear budgets, he criticises SNP's anti-nuclear stance and highlights government commitment towards achieving 24GW of nuclear power by 2050 under the British energy security strategy. He mentions the cost of Hinkley Point C compares favourably with current energy prices. Lastly, he challenges the SNP’s criticism regarding budget allocations to councils.
Anna Firth
Con
Southend West
Question
The MP welcomes the Minister's statement and expresses concern over schools potentially not being able to pay their utility bills due to high energy costs, raising fears of school closures on certain days.
Minister reply
The Minister thanks Anna Firth for her contribution and confirms that schools are a priority for the coming winter. He states that lessons learned from the pandemic will be applied to ensure proper support for schools.
Barnsley South
Question
The MP asks why the Rough gas storage facility off the Yorkshire coast was closed, questioning whether it left the UK with inadequate storage capacity. She now seeks an admission that closure was a mistake.
Minister reply
The Minister states that the closure of the Rough gas storage facility was a commercial decision made by Centrica and not a Government directive.
Mark Pawsey
Con
Rugby
Question
The MP appreciates the Energy Minister's efforts to assist businesses, highlighting concerns over energy bill increases for small engineering companies. He inquires about long-term proposals to decouple electricity bills from gas prices.
Minister reply
The Minister thanks Mark Pawsey and acknowledges that businesses often rely on long-term contracts which can lead to concerning price rises upon renewal. The Government are aware of this issue and it will be a focus for the new Prime Minister.
Tahir Ali
Lab
Birmingham Hall Green and Moseley
Question
The MP criticises the outgoing Prime Minister's suggestion to buy a new kettle as an energy-saving measure, arguing that it is out of touch with struggling families.
Minister reply
The Minister clarifies that the outgoing Prime Minister used the example of a new kettle in reference to long-term planning for nuclear power and accuses Tahir Ali of wilfully misrepresenting the statement.
Tracey Crouch
Con
Truro and Falmouth
Question
The MP highlights the plight of local hospitality, leisure, and indoor play sectors due to rising energy prices and seeks assurance that these sectors will receive necessary support.
Minister reply
The Minister acknowledges Tracey Crouch's commitment to her sector and reiterates the importance of the hospitality, sports facilities, and outdoor play centres. He confirms the Government are aware of the impact of rising energy costs on businesses.
Caroline Lucas
Green
Brighton Pavilion
Question
The MP criticises the Business Secretary's winter energy security update for failing to mention energy efficiency and calls for a retrofit revolution with immediate action on insulation.
Minister reply
The Minister outlines extensive government programmes in place for energy-efficiency including £6.6 billion investment over this Parliament, noting an increase from 14% of homes rated A-C for energy efficiency to 46%. He acknowledges more work needs to be done but highlights the significant progress made.
Mike Wood
Con
Kingswinford and South Staffordshire
Question
I thank my right hon. Friend for visiting my constituency to meet industrial energy users. It is good that the energy-intensive industries compensation scheme is being extended, but firms in many sectors, such as engineering, glassmaking, ceramics or hospitality, do not qualify for the scheme despite relying on large amounts of energy for their core business, with many facing bill increases of 500%, 600% or 700%. What can be done to help them survive and to protect the jobs that my constituents rely on?
Minister reply
I had a helpful and productive day in August, partly spent in my hon. Friend’s constituency, and he and I ran a session for industrial energy users with Andy Street, the brilliant Mayor of the West Midlands Combined Authority. It is important to recognise that many businesses in this country are not in classic energy-intensive industries and therefore do not qualify as such, but are nevertheless big users of energy. We need to ensure that support is available so that such businesses can get through this coming winter. That is exactly the opinion that I have reflected within Government as we move forward.
Naseem Shah
Lab
Bradford West
Question
According to Electric Radiators Direct, Bradford ranks highest in the country for the difference between average resident income and average yearly energy bill. Friends of the Earth claims that 52% of neighbourhoods in Bradford are among the worst affected across England and Wales.
Everybody in the country knows and we in this House know that the energy profits levy is in fact a windfall tax—a Labour idea. We have another suggestion for the Minister: freeze energy prices. The Government can name it what they want. We have the ideas, and we are handing them over. What is stopping the Minister freezing energy bills?
Minister reply
I am not quite sure about Labour’s position. On the one hand, it says that we copied its windfall tax proposal, but it also says that what we have done is somehow inadequate. The energy profits levy is projected to raise twice what Labour’s proposal was ever projected to generate.
When it comes to Bradford, that is exactly why we are ensuring that the assistance is as targeted as possible and goes to the most vulnerable and in-need households. That is why we have offered the one-off payment of £650 to more than 8 million households on means-tested benefits, the cost of living payment to 8 million pensioner households, and the £150 disability cost of living payment to 6 million households. In addition, we have the £144 million discretionary local authority fund for distribution to those identified as being in need. A huge amount of Government action has already taken place, and more is to come.
Scott Benton
Con
Kemptown
Question
My right hon. Friend will be aware of Blackpool residents’ strong objections to fracking, which has already been explored at the Preston New Road site a few miles outside my constituency. Fracking should take place only where it is supported by local communities and only if people can feel the benefit directly in their pockets. Does he agree that a few thousand pounds off energy bills would be quite an inducement for people living close to a fracking site?
Minister reply
My hon. Friend, as ever, makes a telling contribution on Blackpool’s behalf that I am sure the Government will study closely. We are also studying the British Geological Survey report into this matter, to which the Government will respond in due course. Over the past year that I have been Energy Minister, I have heard my hon. Friend stick up for and make a strong case for Blackpool on several occasions in relation to fracking.
Ellie Reeves
Lab
Lewisham West and East Dulwich
Question
Lewisham Council’s energy bill has already doubled from £7 million to £14 million a year, with bills set to go up further. But instead of setting out a plan of support, the Tories have spent this summer fighting among themselves and have even claimed that rising costs should be found from existing public sector budgets—budgets that have already been decimated over the last 12 years. We need serious leadership and a plan now, so will the Minister commit that, in any emergency Budget, public services will be properly supported with rising energy costs?
Minister reply
Public services have always been well supported by this Government throughout the 12 years that we have been in power. When it comes to future taxation, that is, of course, a matter for the Treasury and the Prime Minister.
Jacob Young
Con
Ealing Central and Acton
Question
I am grateful to the Minister for his answers on support for energy-intensive industries such as those in my area. He knows that Teesside is the centre of the green industrial revolution in the UK, with our nuclear power station at Hartlepool, wind power manufacturing on both the north and the south side of the river, and large-scale carbon capture, utilisation and storage and hydrogen production in Redcar and Cleveland. As well as looking at new measures to increase such supply, we must tackle demand. Does he agree that we should invest further in energy efficiency and retrofitting homes, as many families could save hundreds of pounds on their energy bills by simply insulating their homes properly?
Minister reply
My hon. Friend is always a strong voice for Redcar and Teesside. I think that every single question he has ever asked me has included hydrogen somewhere. He is auditioning, I think, to be the UK’s Mr Hydrogen. He has mentioned CCUS as well, which is a big priority of ours, and he is absolutely right to say that energy efficiency is so important. If we can reduce the amount of energy that is used to create the same level of heating in people’s homes, clearly that is a massive gain. That is why we have invested £6.6 billion over the course of this Parliament in energy efficiency.
Meg Hillier
Lab Co-op
Hackney South and Shoreditch
Question
The annual energy costs of a bar on my patch in Shoreditch—it is part of a large chain—have gone up from £30,000 last year to £120,000 this year. All energy contracts are now being renegotiated, with some experiencing an uplift of at least 300%, and since the pandemic some electricity suppliers are refusing to supply the hospitality sector. The Minister has given warm words, but there are two issues there. Will he give us comfort that he will act on at least one of them by talking to the energy suppliers about making sure that more of them can at least compete for the business of these important hospitality businesses?
Minister reply
As ever, the hon. Lady raises an important and telling point. It is worth reminding ourselves, as I said earlier, that businesses tend to have long-term contracts for their energy bills. Prices were lower but they are now rising. There is an advantage in being locked into lower prices for a longer term, but there is, of course, a disadvantage when that long-term contract rolls off and they have to replace it. She is quite right about that. I am happy to look into the specifics of the bar that she mentions. There is no obligation currently on energy suppliers to supply businesses, unlike their obligation to provide to consumers, but I am happy to look into the specifics of the bar that she mentions in her constituency.
Danny Kruger
Reform
East Wiltshire
Question
There is clearly consensus across the House about the need to decouple the price of electricity from the cost of gas. I very much welcome the Minister’s remarks that that is being actively looked at in government. May I encourage him to go a little further, given that we are in this little moment of an interregnum, exploit his licence and tell us what might be the obstacles to doing that quickly and, if we wanted to do it, how fast it could be done?
Minister reply
My hon. Friend invites me to go down a road of policy speculation. What I will say is that many markets and many countries are looking at this specific issue. There are various proposals out there. We are looking carefully at this issue domestically, and we are also looking to see what other countries, other markets and other jurisdictions are doing in this space.
Alison Thewliss
SNP
Glasgow Central
Question
I met a range of organisations during the recess. Most recently, I met David Findlater, the managing director of Calder Millerfield in Dalmarnock, which has been making bakery and butchery products in the area and employing local people for over 60 years, supplying supermarkets and fast food establishments. Its annual prices have gone up from £160,000 for electricity and £30,000 for gas to £712,000 for electricity and £80,000 for gas. It does not know how it will keep going as a business and meet those bills. It wants to hear urgently from this Government that help is coming. Will the Minister give it that assurance?
Minister reply
I thank the hon. Member for her question. I share, and I think we all share, the concern about the rising prices facing not just consumers, but businesses up and down the UK. The Government are keenly aware of the issue, as I said; it is right at the top of what the Prime Minister will be looking to do, and I am sure that announcements will be forthcoming.
Diana R. Johnson
Lab
Kingston upon Hull North and Cottingham
Question
I listened to Edwina Currie this morning telling people to put foil down the back of their radiators to improve energy efficiency. She seemed to miss the point that many of my constituents are not even thinking of switching their radiators on in the first place. I just wonder about those in the left-behind neighbourhoods—the very poorest. In my patch, in Orchard Park, 29% of households are in fuel poverty before we even start, against the national average of 13%. What will the Minister do for those people on Orchard Park who are not able to switch their radiators on this winter?
Minister reply
Obviously, we are very concerned to make sure that consumers are supported through the coming winter. That is absolutely at the heart of the existing Government’s policy, and I am sure it will be part of the incoming Prime Minister’s policies as well.
I ask the hon. Member to tell her constituents to have a look at what the Government have already done—the £39 billion-worth that we have already announced this year, not all of which has taken effect yet. For example, the £400 payment for 29 million households has not yet actually come in. I urge the hon. Member to relay to her constituents that the Government are on their side, have already committed large amounts of public funds to this and, I am sure, will be committing more in the coming months.
Sammy Wilson
DUP
East Antrim
Question
Thanked the Minister for ensuring direct discount on electricity bills to consumers in Northern Ireland and questioned the reliance on renewables, suggesting exploitation of UK gas reserves instead. Questioned about 93 contracts for difference, seeking assurance that companies will not refuse to activate them.
Minister reply
Acknowledged concern over fracking speed and response timing; noted critical minerals strategy's importance due to rare earth metals' dependency on China. Assured on direct discount implementation in Northern Ireland.
Clive Efford
Lab
Eltham
Question
Asked about urgency of support for businesses facing energy contract increases, citing an example of a 300% increase for a family-run business.
Minister reply
Replied that new Prime Minister will soon announce proposals and challenged Labour's record on speedy government actions.
Wera Hobhouse
Lib Dem
Bath
Question
Cited extreme energy bill increases for small businesses in Bath, questioned short-term and long-term support plans from the Government.
Minister reply
Confirmed that announcements on business support would come shortly; acknowledged challenges faced by SMEs and ongoing consideration of measures.
Question
Described struggles for businesses in his constituency due to energy bill increases, requested urgent support.
Minister reply
Noted past Government's strong track record on supporting businesses during the pandemic with £40 billion investment.
Question
Called for urgent action to cut energy costs and questioned renationalisation of energy industry, citing France’s success.
Minister reply
Disagreed on nationalisation and highlighted UK's £37 billion support package compared to European standards.
Stephen Flynn
SNP
Aberdeen South
Question
Criticised UK energy policy for Scotland, suggested that Scotland needs more power.
Minister reply
Disagreed with SNP's stance on nuclear and Scottish oil & gas; argued against dependency on Russia.
Mike Kane
Lab
Wythenshawe and Sale East
Question
Described a business closure due to energy costs, questioned appropriate intervention.
Minister reply
Acknowledged the issue's urgency and highlighted past Government support for businesses.
Question
Questioned fairness towards prepayment metre users who face immediate disconnection upon exceeding debt limits.
Minister reply
Agreed on vulnerability of prepayment metre customers; cited Ofgem measures but invited further suggestions.
Alex Cunningham
Lab
Stockton North
Question
Many industries in Teesside are facing closure due to high energy costs. The MP asks for comprehensive assistance for non-qualifying energy-intensive industries and seeks assurances that the Minister will find ways to help these businesses.
Minister reply
The Government are aware of the job losses at stake and have interacted with companies such as CF Fertilisers over a long period, indicating ongoing engagement.
Daisy Cooper
LD
St Albans
Question
Desperate messages from individuals, hospitals, care homes, schools, and businesses about rising energy costs are being received. The MP asks for an assurance that the Minister will immediately urge the new Prime Minister to make an announcement this week addressing both individuals/households and businesses.
Minister reply
The Minister acknowledges these concerns and indicates that the Government is aware of the situation but cannot speculate on future announcements.
Wayne David
Lab
Caerphilly
Question
Manufacturing in the country faces a severe crisis, with companies like OGM Moulding Innovation facing massive energy cost increases and potential factory closures. The MP seeks an urgent commitment from the Government to come forward with comprehensive support packages.
Minister reply
The Minister acknowledges the difficulties faced by businesses and mentions ongoing engagement with industry through meetings with energy suppliers and discussions with representative bodies.
David Linden
Lab
Kilburn and Maida Vale
Question
A local business, Dentec Hillington, faces a £54,000 increase in energy bills this year. The MP asks if the Government will have announced action by the time he visits the company on Friday.
Minister reply
The Minister declines to speculate on future announcements but suggests that an announcement is imminent.
Debbie Abrahams
Lab
Oldham East and Saddleworth
Question
Business insolvencies are at a 60-year high, and the new Prime Minister's stance on handouts could exacerbate issues such as debt, homelessness, and insolvency. The MP asks for an assessment of these consequences if no reasonable offer is made.
Minister reply
The Minister acknowledges business cost increases but highlights previous Government support during the pandemic and positive economic figures to suggest a better situation than the gloomy scenario proposed by the MP.
Stephen Farry
Alliance
South Antrim
Question
Concerns over Northern Ireland’s unique energy market system, given large elements of future support might apply only to Great Britain. The MP seeks assurance that businesses and households in Northern Ireland will have equal access to UK Government support.
Minister reply
The Chancellor convened a Northern Ireland taskforce to ensure that Northern Ireland receives appropriate UK Government support, aligning it with the rest of the UK.
Paul Blomfield
Lab
Sheffield Central
Question
The focus on previously announced measures does not match the depth of current crisis. The MP urges decisive action to prevent job losses in small businesses, especially in hospitality.
Minister reply
The Minister acknowledges past support but expects further announcements soon and highlights previous substantial support for sectors like hospitality during the pandemic.
Patrick Grady
SNP
Glasgow North
Question
Concerns about housing associations' capacity to provide warmth for tenants and maintain the housing stock, given rising energy costs. The MP calls for a long-term preventive approach to energy security.
Minister reply
The Minister references £6.6 billion investment in energy efficiency measures over the Parliament period and mentions potential future measures from the Prime Minister.
Rachael Maskell
Lab/Co-op
York Central
Question
Charities and churches are facing prohibitive increases in energy costs, potentially unable to secure contracts or maintain services. The MP seeks steps to support these entities.
Minister reply
The Minister acknowledges the global nature of rising energy prices and offers to investigate specific cases of charities struggling with contract issues.
Carmarthen East and Dinefwr
Question
Rising energy costs disproportionately affect lower-income families, while tax cuts benefit higher earners. The MP suggests increasing taxes on higher-rate taxpayers to support those in need.
Minister reply
The Minister declines to comment on specific future Government announcements regarding taxation but expects an announcement soon.
Question
People are really frightened about how they are going to get through this winter. One of my constituents, who is a widow with long-term health issues, has written to me to say that she will have to cancel insurance for her pets and get rid of her car. Her gas and electricity bill was originally £85 a month but now it will go up to more than £255 a month; her energy costs will basically triple. She is terrified about how she will manage this winter, as are many of my constituents.
Minister reply
I am concerned to hear about the hon. Lady’s constituent. The Government have reduced fuel duty at the cost of about £5 billion to the Exchequer, and that will help people to run their cars. We have announced a £37 billion package so far to help consumers with bills, and there will be more to come.
Brendan O'Hara
SNP
Argyll, Bute and South Lochaber
Question
Many people across rural Scotland depend on heating oil to heat their homes. With winter approaching, that is a potential death sentence for vulnerable people in an already economically fragile part of Scotland.
Minister reply
We have reduced fuel duty at the cost of about £5 billion to the Exchequer, and households dependent on heating oil will benefit from the £400 payment and other Government assistance. There is also a £1.1 billion home upgrade grant for improving energy efficiency and clean heating upgrades.
Question
Some 60% to 70% of our energy is domestically produced, yet prices have skyrocketed. The price of producing it has not increased at all, so 60% to 70% of the bill increase is theft by the energy companies charging international rates to domestic companies. May I ask the Minister specifically about the £144 million discretionary fund?
Minister reply
I might have to write to the hon. Member on the question of remeterage. The £144 million discretionary fund is supposed to be disbursed at the discretion of local authorities, in the right way.
Question
The energy price cap is set to double. Businesses have received no support with energy costs, households have simply not received enough and those in park homes have been completely ignored so far.
Minister reply
We will announce measures to assist those living in park homes, houseboats and so on, which are not covered because they do not have a metre point. There will be a scheme announced this autumn to help them.
Matt Western
Lab
Warwick and Leamington
Question
Like many Members, I already have a great number of distressed constituents getting in touch with me desperate for some sort of help. Today, though, I want to focus my comments more specifically on businesses.
Minister reply
On farming, we are interacting regularly with the National Farmers Union, NFU Scotland, NFU Cymru, the Farmers’ Union of Wales and the Ulster Farmers Union to make sure that the voice of farming is heard loud and clear within this Government.
Jim Shannon
DUP
Strangford
Question
On Sunday, just yesterday, one of my constituents closed his family shop, café and restaurant. He said that he had spent much of his life in the village in which he had grown up, but he said that energy costs were so high that he could not continue to trade there.
Minister reply
I hear the hon. Gentleman loud and clear. Northern Ireland is very much at the forefront of our discussions and our considerations.
Shadow Comment
Alan Whitehead
Shadow Comment
The Labour Party criticises the Minister's statement for being vague and complacent. The shadow minister calls for urgent action, including a freeze on energy prices paid for by an additional windfall tax on oil and gas companies making record profits during this crisis. He also emphasises the need for long-term solutions such as a national clean energy sprint for renewables and a comprehensive home insulation programme to insulate 19 million homes. The shadow minister questions why the Government has not removed its ban on onshore wind, which could provide more renewable sources of power, and calls for immediate decoupling of electricity prices from gas prices.
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