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UK Gas Market
20 September 2021
Lead MP
Kwasi Kwarteng
Debate Type
Ministerial Statement
Tags
ClimateEnergyBenefits & Welfare
Other Contributors: 46
At a Glance
Kwasi Kwarteng raised concerns about uk gas market 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 Minister of State for Energy Security addressed the House on the UK gas market situation, emphasising that protecting consumers is the top priority. He assured that there is no risk of supply emergencies this winter and that Britain benefits from a diverse range of gas supply sources, with more than sufficient capacity to meet demand. The global rise in gas prices due to increased demand, particularly in Asia, coupled with reduced variety of supply globally, has put upward pressure on UK gas prices. He reassured the House about security of supply, highlighting the robustness of the Great British gas system and its ability to function effectively despite high wholesale prices. Additionally, he reiterated the Government's commitment to the energy price cap and other support measures for vulnerable customers. The minister also discussed efforts to secure CO2 supplies impacted by fertiliser plant closures due to high global gas prices.
Ed Miliband
Lab
Doncaster North
Question
Miliband questioned the Secretary of State on whether taxpayer support would be necessary to deal with the problem, asking for alternatives if so. He also inquired about plans to support businesses and industries facing difficulties due to price rises.
Ed Miliband
Lab
Doncaster North
Question
Miliband urged the Secretary of State to reconsider the universal credit cut given the rise in energy prices, suggesting automatic operation and extension of warm home discount as a minimum. He highlighted the triple whammy faced by families from national insurance rises and the £1,000 cut in universal credit.
Ed Miliband
Lab
Doncaster North
Question
Miliband questioned the lack of resilience in the UK's energy system leading to large price spikes. He raised concerns about decisions made by previous Governments and urged for a comprehensive plan from Government addressing net zero goals with affordability and security.
Ed Miliband
Lab
Doncaster North
Question
Miliband questioned the Minister's complacency over price impacts, asking about potential taxpayer support for failing energy companies and what happens to their customers. He also urged action on supporting businesses facing difficulties due to rising prices and criticised past government decisions regarding gas storage, efficiency programmes, nuclear programme delays, and net zero strategies.
Minister reply
Kwasi Kwarteng apologised for the length of his statement and defended the Government's plans as well-received. He emphasised protection for vulnerable customers through measures like the warm home discount.
Stephen Crabb
Con
Question
Crabb praised the Secretary of State’s comments on UK energy supply diversity and requested a commitment to work with him, Milford Haven port authority, and industry for transitioning towards floating offshore wind and renewable sources.
Minister reply
Kwasi Kwarteng committed to visiting Dragon LNG and supporting 1 GW target for floating offshore wind by 2030.
Stephen Flynn
SNP
Aberdeen South
Question
Flynn criticised the Government's policies, including austerity measures, national insurance hikes, universal credit cuts, and lack of support for businesses facing rising gas prices. He urged new financial support and called on the Chancellor to scrap the universal credit cut.
Minister reply
Kwasi Kwarteng refuted re-litigating Brexit and acknowledged hydroelectric power's importance but noted geographical limitations compared to countries like Norway. He emphasised focus on safety, consideration, and protecting vulnerable customers.
Question
Leadsom agreed on the need for urgent electricity market reform including an independent system operator and more local generation pricing.
Minister reply
Kwasi Kwarteng thanked her, acknowledged past reforms, and reiterated ongoing conversations about modernising the way we balance the electricity system.
Darren Jones
Lab
Bristol North West
Question
Can the Secretary of State guarantee that the warm home discount rebate will continue to be paid to consumers who change energy suppliers?
Minister reply
The Minister notes this as a fiscal issue requiring Treasury discussion but does not provide a direct guarantee.
Question
Will the Secretary of State urgently discuss with industry about increasing gas storage capacity?
Minister reply
The Minister agrees on the importance of discussing gas storage and acknowledges uncertainty around the duration of current market conditions but wants to avoid panic.
Barnsley South
Question
Why did the Government allow the Rough gas storage facility off Yorkshire's coast to close without taking action?
Minister reply
The Minister states that the UK has a wide range of energy supply sources, including offshore wind capacity, and does not think alarmism is necessary.
Question
Does diversity in energy supply—diversity of source, generation and location—reduce long-term market volatility risks?
Minister reply
The Minister confirms a degree of robustness across gas supplies, electricity generation and geographical spread.
Justin Madders
Lab
Ellesmere Port and Bromborough
Question
What discussions are taking place regarding CF Fertilisers' closure due to cost pressures in his constituency?
Minister reply
The Minister confirms ongoing support for both CFF plants and acknowledges the importance of supporting employment.
Question
Is the Secretary of State aware of potential domino effects impacting chemical industry companies supplied by CF Fertilisers?
Minister reply
The Minister agrees on the interconnectedness of industries and confirms discussions with CFF regarding site sustainability.
Question
Will the Secretary of State seriously reconsider his position and lobby for a reversal of the £20 universal credit cut?
Minister reply
The Minister indicates ongoing conversations with the Chancellor about measures to protect consumers from gas price hikes.
Question
Does my right hon. Friend agree that we should prioritise domestic sources for natural gas while still maintaining demand?
Minister reply
The Minister agrees and praises projects like Acorn in his constituency, committing to carbon capture and domestic supply.
Wera Hobhouse
Lib Dem
Bath
Question
What is the Government’s precise timeline for phasing out natural gas grid dependency and replacing it with renewables?
Minister reply
The Minister notes ongoing trials regarding hydrogen use in decarbonising the gas grid but cannot provide a specific timeline.
Question
Is Russia's weaponisation of gas supply causing collateral damage to UK and Europe, and should we prepare for long-term implications?
Minister reply
The Minister reassures that the UK is not dependent on Russian gas and outlines alternative sources of supply.
Stephen Kinnock
Lab
Aberafan Maesteg
Question
Is the Secretary of State engaging with the steel industry to ensure this crisis does not cripple it?
Minister reply
The Minister confirms ongoing engagement with the steel sector, including resuscitation of the Steel Council.
Steven Baker
Con
Wycombe
Question
Requests the Minister to prioritise affordability and security of supply by removing all fiscal disincentives to oil and gas exploration, including shale gas, to increase domestic production levels.
Minister reply
Acknowledges the concern over shale gas but cites past incidents leading to a moratorium. Emphasises understanding the importance of prices, profit and loss in economic terms.
Caroline Lucas
Green
Brighton, Pavilion
Question
Critiques the Government's failure to prioritise energy efficiency measures like home insulation. Asks when the heat and building strategy will be published.
Minister reply
Responds that the heat and building strategy has been discussed numerous times and it is due for publication soon.
Virginia Crosbie
Con
Plymouth, Moor View
Question
Supports efforts to reduce dependence on fossil fuels and accelerate transition to renewable energy, referencing Wylfa Newydd in her constituency.
Minister reply
Acknowledges the importance of nuclear power as part of the energy mix for future security.
Alex Cunningham
Lab
Stockton North
Question
Expresses concern over CF Fertilisers' production stoppage in his constituency due to rising fuel prices and lack of appropriate support.
Minister reply
Acknowledges the cost reduction trend for renewables but indicates ongoing discussions regarding specific policies to address CF Fertiliser's issues.
Bim Afolami
Con
Welwyn Hatfield
Question
Asks about expectations of current global gas prices and Government plans beyond Wylfa Newydd for large-scale nuclear power.
Minister reply
Avoids speculation on future gas prices but reaffirms commitment to nuclear energy, including small modular reactors.
Neale Hanvey
SNP
Dundee East
Question
Proposes a publicly owned energy company as a solution for Scotland’s fuel poverty issue.
Minister reply
Responds that the proposal contradicts his free market stance but suggests exploring various solutions with industry and government.
Robert Halfon
Con
Harlow
Question
Requests maintenance of fuel duty freeze and reduction in VAT on energy bills.
Minister reply
Acknowledges the importance but clarifies these are out of his remit as Secretary of State.
Zarah Sultana
Lab
Coventry South
Question
Critiques political choices exacerbating poverty and urges cancellation of universal credit cuts, raising taxes on the rich, and public ownership of energy companies.
Minister reply
Responds dismissively, suggesting it is a standard opposition stance.
Rochford and Southend East
Question
Queries the progress on achieving 80 GW interconnectors by 2030 as outlined in previous White Paper.
Minister reply
Acknowledges importance of interconnectors, reiterates commitment to target despite recent incidents.
Jamie Stone
Lib Dem
Caithness, Sutherland and Easter Ross
Question
Questions the current level of fuel price cap and suggests a Northern Rock-type enterprise to support struggling energy companies.
Minister reply
Confirms commitment to price cap mechanism but clarifies Ofgem's responsibility for determining the level. Opens dialogue with MP on customer protection ideas.
Mark Pawsey
Con
Rugby
Question
Praises National Grid’s infrastructure, particularly at Churchover in his constituency, and queries future introduction of hydrogen into the supply network.
Minister reply
Acknowledges robustness of current system due to long-term investments and planning.
Clive Efford
Lab
Eltham and Chislehurst
Question
The Secretary of State said we have to wait for his plan to find out what he will do to retrofit buildings and reduce dependence on carbon fuels, but local authorities across the country are way ahead of the Government. My local authority in Greenwich is experimenting with air-source and ground-source heat pumps. When he produces his report, does he think local authorities will be front and centre in creating local plans so that we can drill down into local communities to bring about the change we need to achieve zero carbon?
Minister reply
The hon. Gentleman is right that I welcome local initiatives. Only a month ago, I spoke at a forum at which representatives of local government were enthusiastic about getting behind net zero. I welcome all initiatives where local leaders are driving the push to net zero.
Question
We have heard a typically reliable and reassuring statement from my right hon. Friend. He mentioned the Ofgem guarantee for when a supplier fails. Will that guarantee protect customers’ credit balances, and how soon will they be able to access them? Will fixed-term deals that customers have negotiated with their current supplier always be respected through the transfer?
Minister reply
My hon. Friend did not mention it in particular, but we have a supplier of last resort process, which has been relied upon over the past few years and involves a transfer of customers in the way he describes. We may well have an updated version of that process in the light of the threats posed to a number of suppliers.
Question
The Secretary of State says he is working on contingencies, but the meat industry says its CO2 supplies will be depleted within a fortnight. Is he sure that pork and poultry will not be the next items to disappear from our supermarket shelves?
Minister reply
I am working very closely with my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs. We have spoken to the Treasury, and we are keen to push forward plans very soon to make sure there is a consistent and regular supply of CO2.
Julian Lewis
Con
New Forest East
Question
As Russia completes its sinister Nord Stream 2 pipeline and tightens its stranglehold on gas supplies to Europe, why are we not fully exploiting Rolls-Royce modular nuclear reactors to decrease our indirect dependence on Russian gas and our direct dependence on French and Chinese nuclear technology?
Minister reply
My right hon. Friend knows that coming up with a fleet of small modular reactors cannot be done overnight. It takes about 10 years to develop the technology. As I have said repeatedly, it is a key part of our nuclear strategy and is the third point of the Prime Minister’s 10-point plan.
Rachael Maskell
Lab Co-op
York Central
Question
The question my constituents will have today is what the cost will be to them. As we know that serious costs are coming on to some of the poorest people in our constituencies, will the Secretary of State commit to speaking to the Secretary of State for Work and Pensions about cancelling the cut to universal credit and will he speak to the Chancellor about putting additional measures in place to avert fuel and food poverty?
Minister reply
The hon. Lady will appreciate that I speak to colleagues across Government all the time, particularly in respect of alleviating and lessening the burden on very vulnerable constituents.
Caroline Johnson
Con
Sleaford and North Hykeham
Question
The Secretary of State spoke of the challenges facing CO2 supply, which is crucial to the food and healthcare industries. What work are the Government doing to ensure there is supply, and can he confirm that there will not be any deficit of CO2?
Minister reply
I spoke to the CEO of CF Fertilisers yesterday, and a number of hon. Members have raised that concern. We are trying to see how we can secure a constant supply of carbon dioxide.
Ben Lake
PC
Ceredigion Preseli
Question
The loss of the IFA interconnector last week saw the UK lose two fifths of its capacity to import electricity from Europe, further increasing our dependence on natural gas. What pressure are the Government bringing to bear on National Grid to speed up these repairs and to invest the 19% increase to its pre-tax profits to better secure the UK’s energy network?
Minister reply
The hon. Gentleman is right to raise that issue. Clearly, to have interconnectors fail in the way they did last week, in the midst of a global gas price spike, is very concerning. We are looking at what went wrong and seeing what we can do with National Grid to hold it to account and to make sure that the risk of this happening again is minimised.
Question
The rise in the wholesale price of gas began back in January, with it rising by 250% since then. Why did no one in the Department anticipate this scenario?
Minister reply
We have anticipated many scenarios. I alluded to the fact that the oil price went from about $20 a barrel to $80 a barrel within just one year, and we have always been aware that commodity prices, particularly where demand can be very volatile, can be extremely volatile indeed.
Question
The Secretary of State has just talked about the volatility of the market, but there is no denying that the Prime Minister assured us that energy prices would fall post Brexit. As many of my constituents are set to fall further into fuel poverty and as 10,406 of them face a cut of £20 a week in their universal credit, can the Secretary of State tell us what he thinks of the Prime Minister’s irresponsible and wildly misplaced assurances about the future of energy prices?
Minister reply
As I said to one of the hon. Lady’s colleagues, I am not here to re-fight the 2016 battle of Brexit; it should be accepted, in her case with good grace. We have moved on from the Brexit debate, and I am extremely focused on ensuring security of supply and ensuring that vulnerable customers are protected from undue increases in the price of gas.
Question
May I just take the Secretary of State back to his statement, where he said he is going to be making a joint statement with Ofgem this afternoon? Assuming that that has in it some announcements that he has not covered in his statement just now, may I ask for an assurance as to when he is going to come to the House to update us? Perhaps Mr Speaker could arrange for that statement to take place tonight at 10 pm, so that we can question the Secretary of State. I ask that because, as he will know, 15% of energy consumers are off the gas grid, with a bigger proportion in constituencies such as mine. They do not benefit from the price cap, so will he set out at the Dispatch Box for those local consumers of mine in the Forest of Dean how he is going to be helping them with this very significant rise in gas prices?
Minister reply
I cannot make any assurances of that kind to my right hon. Friend. As a former Chief Whip, he knows the practices of this House very well. In fact, I seem to recall that in those coalition days we frequently made statements, not necessarily on the Floor of this House.
Question
Given that Wales is a major net exporter in electricity and came second in the UK growth index for the potential for green development, what are the British Government doing to ensure that the Welsh Government have all the levers they need to reach their potential and ensure that the people of Wales get a dividend from our strength in electricity production?
Minister reply
The hon. Gentleman makes a good point. I am not sure whether we have scheduled this in, but one action point is that I want to do a call with the devolved Administrations this afternoon.
Question
I welcome the steps this Government has already taken to protect energy supply in the UK, specifically the warm home discount scheme and the winter fuel payment scheme. Will my right hon. Friend expand on the ways in which he is working with colleagues across Government to protect the most vulnerable, in Clwyd South and the rest of the UK, during this winter?
Minister reply
We have consistently, in our discussions on net zero and in our attempt to decarbonise the economy, sought to protect the most vulnerable of our constituents. He will know that I am seeking to protect the schemes he mentioned and, if possible, to enhance them.
Jim Shannon
DUP
Strangford
Question
Gas users in towns and rural areas throughout Northern Ireland face a 35% increase in the cost of gas. One in five families in Northern Ireland is in fuel poverty. It is clear that this is fast becoming a cold and long winter for the working poor on the poverty line. How will the Secretary of State and the Government give the assistance that will surely be needed for those who need it the most?
Minister reply
My hon. Friend the Member for Clwyd South (Simon Baynes) mentioned the warm home discount and the winter fuel payments; we try to protect the most vulnerable with lots of such schemes.
Question
I thank the Secretary of State for his statement. On a practical level, will he ensure that Ofgem recruits more customer-facing advisers and has a fully functioning helpline and easy-to-use website, so that those consumers whose energy supplier does go bust, whether in Kettering or elsewhere, do not face a Driver and Vehicle Licensing Agency-type customer service experience?
Minister reply
My hon. Friend can rest assured that I will raise those precise points with the chief executive of Ofgem when I speak to him tomorrow.
Jack Brereton
Lab
Stoke-on-Trent South
Question
The fluctuations in commercial gas prices particularly affect energy-intensive sectors such as ceramics, and the high price of commercial electricity does not encourage the transition from gas. Will my right hon. Friend look into what more can be done to support energy-intensive sectors and to support jobs like those in the ceramics sector in my Stoke-on-Trent South constituency?
Minister reply
I was pleased over the summer to see the advanced ceramics manufacturers and the great work that is done in my hon. Friend’s constituency and neighbouring constituencies. Having worked with the steel industry, I am conscious that we need a plan to reduce electricity costs.
Tobias Ellwood
Con
Bournemouth East
Question
With threats in the grey zone increasing, is Russia playing ball with its gas prices?
Minister reply
It is not for me to comment on Russian energy policy or strategy here, although we can speculate about its motives. My job, and that of the Government, is to ensure that, whatever Russia does, we have security of supply and can protect our most vulnerable consumers. That is exactly what we are doing.
Shadow Comment
Ed Miliband
Shadow Comment
The shadow Secretary of State questioned the Government's complacency regarding price and economic impacts, urging for more support measures for businesses facing difficulties. He highlighted concerns over the rise in the energy price cap pushing half a million families into fuel poverty and criticised the decision to cut universal credit. Miliband also raised issues around government decisions that contributed to current challenges, such as the closure of Rough gas storage facility and delays in retrofitting plans. He called for a comprehensive plan from Government addressing net zero goals with affordability and security.
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