Commons Sense

House of Commons · Ministers' Questions

Cost of Energy

Tuesday 21 March 2023 · 7 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 5 Partly answered 2 Not answered 0

Key points

  • The Government have provided 94 billion to support households and 8 billion to support businesses with energy costs.
  • The Minister wrote to Ofgem regarding the investigation into the business energy market, which is not regulated like the consumer market.
  • The Government introduced a 75% reduction in business rates up to a cap of 110,000 to support businesses, particularly in the hospitality sector.

Topics (select to filter)

Questions & Answers

Q1 Tom Randall
Economy Energy
Context

N/A

Question

What fiscal steps he is taking to support households with the cost of energy?

Answer from Jeremy Hunt

The Government have provided unprecedented support to help households and businesses with energy costs, totalling £94 billion for households and £8 billion for businesses. That is more than £100 billion over 2022 and 2023.

Answered
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Q2 Robbie Moore Con Keighley and Ilkley
Energy Business & Trade
Context

A local foundry business in Keighley, Leach & Thompson, is facing a dramatic impact from increased standing charges by British Gas.

Question

One of my local foundry businesses based in Keighley, Leach & Thompson, has kindly contacted me to say that British Gas wants to charge it £41.50 a day as a standing charge and that its unit rate has doubled. That is having a dramatic impact on the business. The Government have helped with the unit charge, but will the Chancellor outline what steps he is taking to help support small and medium-sized businesses with the extortionate standing charges being quoted by energy companies?

Answer from Jeremy Hunt

I thank my hon. Friend for raising this issue, which I know is shared by many Members across the House. That is why on 9 January I wrote to Ofgem asking it to update me on its investigation into the business market, which is not a regulated market like the consumer market. It has replied saying that it has concerns. It is concerned about significant changes in standing charges, about an increasing number of suppliers asking for security deposits and raising the cost of those deposits, and about potential breaches of the rules of the energy bill relief scheme. It will get back to me with its solutions as soon as possible.

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Q3 Julian Sturdy Con
Energy Business & Trade
Context

Businesses in the hospitality sector are concerned about energy bills and their viability over the next six months.

Question

When I was talking to businesses in York on Friday, they stressed to me that energy bills were still a major worry for many of them, especially in the hospitality sector, which is so important to our city. It is clear that the next six months will be critical for many of those businesses, so can the Chancellor provide any more targeted support, especially to the hospitality sector?

Answer from Jeremy Hunt

I ask my hon. Friend to keep me updated on what is happening with the hospitality sector in his constituency, but he will know that we have already introduced support for business rates, with a 75% reduction in business rates up to a cap of £110,000, and that the energy bills discount scheme is providing more than £8 billion of support over this year and last. We are doing everything we can.

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Q4 Tom Randall
Energy
Context

There is a need for a long-term energy strategy to help with the cost of living, including support for nuclear energy.

Question

Does my right hon. Friend agree that a long-term energy strategy is critical to helping people with the cost of living? Will he outline what steps the Government are taking to enable this through the funding of nuclear energy?

Answer from Jeremy Hunt

My hon. Friend is absolutely right to raise this issue, as is my hon. Friend the Member for Ynys Môn (Virginia Crosbie), who does so on every single occasion she can. Nuclear is important because there will be times when the weather does not generate the energy we need from renewable sources. That is why we announced in the Budget that we are going ahead with Great British Nuclear and with the competition for small modular reactors, provided that an investigation this year finds that that is viable, and we will class nuclear power as environmentally sustainable, subject to consultation.

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Q5 Christine Jardine Lib Dem Edinburgh West
Energy Business & Trade
Context

Whisky distillers in Scotland are facing a 10% increase in energy prices and feel they are not being supported.

Question

A number of small businesses in my constituency are struggling with their energy costs, and two have recently gone to the wall, but major companies in the whisky sector are also struggling. The Chancellor says that the Government are doing what they can to support them, but does he appreciate that that is not how it feels in Scotland? This major industry, with its high-intensity use of energy in distilling, is facing a 10% increase, which will mean that something like 75% of the price of a bottle of whisky goes to the Exchequer. The industry does not feel like it is being helped. Does he appreciate that it feels like it is being kicked at a very difficult time?

Answer from Jeremy Hunt

I recognise the challenges that the distilling industry and many other industries are facing. That is why we are giving more than £100 billion of support to businesses and consumers, but I would say to the hon. Lady that Scotch whisky has received nine cuts or freezes in the last 10 Budgets, so we are doing everything we can.

Partly answered

Not addressed: The specific challenges faced by the whisky distilling industry were not directly addressed

How: We Are Doing Everything We Can

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Q6 Alison Thewliss SNP
Energy Business & Trade
Context

Businesses in the constituency are stuck on very high energy tariffs due to contract lock-ins.

Question

It is all fine and well for the Chancellor to say that he is in correspondence with Ofgem, but the business energy sector remains unregulated and many businesses in my constituency are stuck on very high tariffs because of the increase in prices, which have now to some degree gone down. What will he do about those people who are marooned on higher tariffs? It is costing their businesses dearly and those businesses may not even survive.

Answer from Jeremy Hunt

That is exactly why I wrote to Ofgem. Wholesale gas prices are now lower than they were before the Ukraine invasion. The hon. Lady is right to say it is not a regulated market and I want to find out from Ofgem what it thinks should happen to avoid precisely the problem she talks about.

Partly answered

Not addressed: The specific actions being taken or planned to help businesses stuck on high tariffs were not detailed

How: Writing To Ofgem

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Q7 Margaret Ferrier SNP
Energy Business & Trade
Context

Pubs and breweries are struggling with high energy costs due to locked-in contracts and the increase in alcohol duty.

Question

Many pubs and breweries are locked into energy bill contracts that are staggeringly high, and they are calling for an opportunity to renegotiate them. What further support will Ministers offer the sector with its energy bills, particularly recognising the financial impact that the increase in alcohol duty will have?

Answer from Jeremy Hunt

We are doing a great deal. As the hon. Lady will know, we set up a new scheme, the energy bills discount scheme, to help businesses in the coming year. As I mentioned to my hon. Friend the Member for York Outer (Julian Sturdy), we are also giving them 75% relief on their business rates. We will continue to do everything we can for this very important sector.

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