Mike Wood – 2022 Speech on Energy Price Capping

The speech made by Mike Wood, the Conservative MP for Dudley South, in the House of Commons on 8 September 2022.

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.