Category: Energy

  • Wera Hobhouse – 2023 Speech on the Independent Review of Net Zero

    Wera Hobhouse – 2023 Speech on the Independent Review of Net Zero

    The speech made by Wera Hobhouse, the Liberal Democrat MP for Bath, in the House of Commons on 9 February 2023.

    It is a pleasure to follow the right hon. Member for Gainsborough (Sir Edward Leigh), because it is important to hear where people’s concerns are. The report sets out the fact that we must overcome our concerns because we have no option: we need to reach net zero. The House knows how passionate I am about making sure that this country reaches its net zero targets.

    While recent news has overwhelmed us with the tragedies of war and natural disasters, the climate emergency continues to threaten our global future. We have to act together, in solidarity. I welcome the independent review of net zero. It is uncompromising in its demand that the Government get a grip and actually deliver on the targets they have set themselves. Last year, the Climate Change Committee made a similar point: tangible progress now lags badly behind the country’s net zero ambitions.

    We are on course to overshoot our target level of greenhouse gas emissions twofold. The CCC had previously set the Government several targets for 2022 to stay on course for net zero by 2050; only a fifth of them have been achieved. This is an unforgivable underperformance and shows that the Conservative Government’s commitment to net zero is lukewarm at best. We need to do a lot more persuasion. It is about winning hearts and minds, not just in this House but in our local communities, to persuade people that we need to get to net zero. The commitment has to be more than lukewarm: it has to be hot and passionate. We want to get to net zero.

    Too many people still treat our net zero targets like a bus that we can miss and then catch another. We must understand that there will be no next time if we do not reach net zero by 2050—and that means net zero globally. Climate change is already leading to chaotic consequences in our societies. Since 1950, the global number of floods has increased by a factor of 15 and wildfires have increased by a factor of seven. We have seen droughts and famine across east Africa, floods in Pakistan and a heatwave in the UK. The dangers of missing net zero are staring us right in the face. The difference in limiting global warming to 1.5°C instead of 2° would save around 420 million people from exposure to extreme heatwaves.

    Our Government should be leading by example—I say that for the third time now. We are an advanced economy. We cannot tell economies that are less advanced that they have to get to net zero but our contribution is so tiny that it does not matter. It matters that we lead by example. I am so glad we have a report that says that net zero is not only good for the planet but makes sense economically. We will miss out hugely if we do not really get to grips with this and deliver on the targets. We must set ourselves ambitious targets and be very passionate and hot about them, not just lukewarm. What message does it send to the rest of the world when our advanced economy does not meet its obligations in the global fight to keep temperature rises below 1.5°?

    The independent review recognises that the Government’s tepid approach to net zero means the UK is losing out on green investment. This concern is shared by the Confederation of British Industry and many renewable energy companies, such as Equinor, SSE and Vattenfall. The USA and the EU are developing huge financial packages to encourage green investment, and China is currently the biggest investor in renewable energy, while our Government are still playing to the tune of the oil and gas giants. The UK lags behind all but one of its G7 counterparts in investment in green infrastructure and jobs. It is a massive missed opportunity.

    We are in a cost of living crisis because of our reliance on gas and oil. The Government fail to recognise that the fastest and cheapest way to guarantee energy security is to phase out oil and gas rather than invest in more exploration and extraction. I welcome the fact that we now have the new Department for Energy Security and Net Zero—that the two have been put together—because so much of energy security depends on our getting to net zero and phasing out our reliance on gas and oil.

    I am pleased that the net zero review recommends that the Government support the Local Electricity Bill. The lack of growth in community energy in the past seven years is a significant missed opportunity. Its major strength is its connection to people and places. It engages people in energy systems and makes that important connection so that we win hearts and minds and people see the advantages of changing. I absolutely agree that change is difficult and we need to get people behind the net zero agenda.

    In my Bath constituency, Bath and West Community Energy has installed enough renewable energy to power nearly 4,500 homes. Many of the projects are installed in local school and community buildings. The energy is net zero and far cheaper than gas and oil, but the huge potential for more community energy cannot be realised because current energy market and licensing rules mean that community energy schemes face high grid-access costs.

    The Local Electricity Bill would reform the energy market to empower community-owned and run schemes to sell local renewable energy directly to households and businesses. It would make new community energy businesses viable, and those businesses would keep significant additional value within local economies by bypassing large utilities. It is incomprehensible to me why the Government are dragging their feet on enacting this vital change to help an industry that has so much potential not only in reaching net zero but in doing exactly as we are doing with this debate—aiming to win hearts and minds and make people and politicians aware of how important net zero is and how deliverable and advantageous for our society it will ultimately be.

    The transition to net zero must be at the heart of every Government policy if we are to hit our targets. The Climate Change Committee has criticised the lack of joined-up thinking on net zero in the Government. Last year, I spoke to a group of sub-national transport bodies that noted the lack of synergy between the Department for Transport and the Department for Levelling Up, Housing and Communities in the development of sustainable land planning principles. That is just one example of siloed thinking in the Government.

    I agree with the review that there needs to be a group with actual power that can work across Government to ensure that net zero is considered in every policy decision. A net zero delivery authority, as outlined in a recent Policy Connect paper, could do exactly that. Such a public body should be placed on a statutory footing and operate at arm’s length from the Government to provide assurance to business and people about its longevity and clout. It would be tasked with monitoring and accelerating the delivery of key net zero strategies.

    The Government would set the authority’s objectives, rules and principles of operation and the authority would then be responsible for delivery within that framework. I am glad that we have already discussed that this afternoon. [Interruption.] I hope the Minister is listening, because he might be involved in setting up such an authority. I am looking forward to progress with that.

    A net zero delivery authority would co-ordinate the delivery of Government strategies between local and national Government. That, too, is incredibly important and has already been mentioned. The delivery of many of our net zero targets should be devolved to local areas, because local people know best, and the delivery of net zero can be so much better achieved through local authorities. The authority would gather information and understanding about local delivery from local government and businesses to inform the national strategy. It would work with partner organisations and national bodies to inform both national and local delivery strategies for decarbonisation.

    However, a net zero delivery authority is not enough, which is why we, as Liberal Democrats, are proposing a net zero action plan, backed by a £150 billion public investment programme to fire up progress to net zero and help the UK become a global leader in future technologies. What a net zero delivery authority could do is avoid policy inconsistency and ensure total focus within Government on the climate emergency.

    The net zero transition will impact every aspect of our lives. The evidence is clear that the costs of combating the climate emergency are dwarfed by the consequences of inaction. We must all work together to deliver the net zero transition as efficiently and sustainably as possible. If we do not do so, we risk losing the battle to preserve our climate, the future of our country and the wellbeing of our people.

  • Jane Hutt – 2023 Statement on Meeting with Energy Suppliers

    Jane Hutt – 2023 Statement on Meeting with Energy Suppliers

    The statement made by Jane Hutt, the Welsh Minister for Social Justice, on 4 January 2023.

    People across Wales are facing an unprecedented cost-of-living crisis, fuelled by soaring energy, fuel and food costs The cost-of-living crisis is having a devastating impact, particularly on low-income households. Current estimates suggest up to 45% of all households in Wales could be in fuel poverty following increases to the energy price cap.

    The Welsh Government is doing all it can to support households in Wales, filling the gap left by the UK government. We have allocated £90m to provide support to vulnerable households to meet rising energy costs. This includes a second Welsh Government Fuel Support Scheme in 2022-23 and we are working in partnership with the Fuel Bank Foundation to deliver a £4m fuel voucher scheme aimed at those on prepayment meters and those off the gas grid. The Welsh Government has also made additional funding available to the Discretionary Assistance Fund (DAF) this financial year to help people who are struggling financially with support for off-grid households.

    Free impartial advice is available to all households via our Warm Homes Programme Nest scheme. An enhanced winter fuel campaign commenced on 1 November, targeting a wider audience with much needed energy efficiency advice and guidance. This service is accessible to all. Where eligible, households may be entitled to a package of energy efficiency support.  The Minister for Climate Change has made a number of improvements to the Warm Homes Programme Nest Scheme this year investing in innovation through solar PV and exploration of battery storage enabling homes to use energy at source.

    However, there is a responsibility on the energy suppliers to provide appropriate support for their customers.  I am deeply concerned, as more households fall behind with the payment of their electricity and gas bills, they may be unfairly driven onto pre-payment meters.

    Approximately 200,000 households in Wales use pre-payment meters for their mains gas and electricity. This represents approximately 15% of all households and 24% of tenants in the private rented sector. Almost half of social housing tenants (45%) also use pre-payment meters. Many of these bill payers are on the lowest incomes yet are paying the highest tariffs for their energy.

    On 22 November, Ofgem published their own findings into how energy suppliers are helping customers through this period of high energy prices. In their deep dive, Ofgem explored how suppliers treat ‘Customers in a Vulnerable Situation’.

    Findings showed that, although some good practice was identified, all suppliers need to make further improvements. Severe weaknesses were found in five suppliers, moderate weaknesses were found in another five suppliers and minor weaknesses were found in seven suppliers.

    On 21 and 29 November and 7 December, I met with representatives from a number of energy suppliers to discuss the issues surrounding pre-payment meters and the cost-of-living crisis.

    I was told by the suppliers that moving householders onto pre-payments meters was seen as a last resort, and whilst there was a perception pre-payment meters are linked to debt, some suppliers stated the majority of their pre-payment customers used the meters as a tool to control usage.

    Suppliers confirmed to me they try to actively engage with their customers before a pre-payment meter is considered and, in most cases, there is a lengthy process to follow before one is installed, in agreement with the householder. There are measures in place to determine who is considered to be appropriate for a pre-payment meter

    Energy suppliers agreed to share with the Welsh Government data on the number of households being supported with their energy bills and/or being transferred onto pre-payments meters, and the reason for doing so, in order for my officials to assess the situation. They also agreed to provide information on ‘self-disconnection’. This is vitally important to allow us to understand the nature of self-disconnection, and to design policy responses.

    Not all energy suppliers have standing charges for pre-payment meters. Some of those who currently apply a standing charge agreed to hold further discussions regarding the removal of standing charges. The removal of standing charges was also something I raised again with Ofgem in a meeting on 29 November.

    We have made it clear that energy companies should absorb the cost of standing charges for pre-payment customers who are particularly at risk of disconnection as a result of the rising cost of fuel. This should not be a cost for the Government to take on.

    It is important we identify and support customers who are starting to struggle as early as possible. Energy suppliers have advised they can provide their customers along with other support mechanisms, such as funds set aside to help those who are struggling the most to pay their bills and flexible payment plans.

    Following a meeting with Ofgem on 29 November, I remain concerned that a worryingly large number of householders on a traditional pre-payment meter have not used their vouchers as these have a 90-day expiry date. It is important these householders use their vouchers. I would also encourage customers in vulnerable situations to contact their energy supplier to register themselves as vulnerable.

    Welsh Government has consistently called on the UK Government and Ofgem to introduce a social tariff to protect the most vulnerable householders and there was broad support for this from energy suppliers.

    I will be holding a follow up meeting with energy suppliers in the new year, followed by quarterly meetings. I will seek further assurances that the weaknesses identified by Ofgem are being addressed and continue to push for the greatest levels of support for the most vulnerable in our society.

    This statement is being issued during recess in order to keep members informed. Should members wish me to make a further statement or to answer questions on this when the Senedd returns I would be happy to do so.

  • Sarah Green – 2023 Parliamentary Question on Forcing Prepayment Meters on Customers

    Sarah Green – 2023 Parliamentary Question on Forcing Prepayment Meters on Customers

    The parliamentary question asked by Sarah Green, the Liberal Democrat MP for Chesham and Amersham, in the House of Commons on 18 January 2023.

    Sarah Green (Chesham and Amersham) (LD)

    Many of my constituents are struggling to keep up with their energy bills this winter. When families fall behind, they are too often punished by being switched over to prepayment meters, which are more expensive do nothing to help their financial situation. Will the Prime Minister back our call to ban energy companies from forcibly installing prepayment meters and stop them switching smart meters over to prepayment meters remotely?

    The Prime Minister

    I want to assure the hon. Lady that Ofgem has specific regulations in place regarding the use of prepayment meters and how energy companies should treat those who are struggling with their bills. I am pleased to say that her constituents will receive, at a minimum, around £900 of support with their energy bills this winter as a result of this Government’s actions.

  • James Cartlidge – 2023 Statement on the Energy Bills Discount Scheme

    James Cartlidge – 2023 Statement on the Energy Bills Discount Scheme

    The statement made by James Cartlidge, the Exchequer Secretary to the Treasury, in the House of Commons on 9 January 2023.

    Following a review of the energy bill relief scheme (EBRS), the Government today announce a new energy support scheme for businesses, charities, and the public sector. The new energy bills discount scheme (EBDS) will provide all eligible UK businesses and other non-domestic energy users with a discount on high energy bills until 31 March 2024, following the end of the EBRS in March 2023.

    This will help businesses locked into contracts signed before recent substantial falls in the wholesale price manage their costs and provide others with reassurance against the risk of prices rising again.

    This further support follows the Government’s unprecedented package for non-domestic users through this winter through the EBRS, worth £18 billion per the figures certified by the OBR at the autumn statement.

    At autumn statement, we were clear that such levels of support, unprecedented in their nature and scale, were time-limited and intended as a bridge to allow businesses to adapt. Wholesale energy prices are falling and have now gone back to levels seen just before Putin’s invasion of Ukraine. But to avoid a cliff-edge for businesses and provide reassurance against the risk of prices rising again, we are launching the new energy bills discount scheme, giving them the certainty they need to plan ahead.

    The new scheme strikes a balance between supporting businesses over the next 12 months and limiting the taxpayer’s exposure to volatile energy markets, with a cap set at £5.5 billion based on estimated volumes.

    Through the scheme, from 1 April 2023 to 31 March 2024, eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill, except for those benefiting from lower energy prices. The relative discount will be applied if wholesale prices are above a price threshold of £302/MWh for electricity and £107/MWh for gas.

    A substantially higher level of support will be provided to businesses in sectors identified as being the most energy and trade intensive—predominately manufacturing industries. A long-standing category associated with higher energy usage, these firms are often less able to pass through cost to their customers due to international competition. Businesses in scope will receive a gas and electricity bill discount based on a price threshold, which will be capped by a maximum unit discount of £40.0/MWh for gas and £89.1/MWh for electricity. This discount will only apply to 70% of energy volumes and will apply above a price threshold of £185/MWh for electricity and £99/MWh for gas.

    This Government are committed to supporting UK business and the voluntary sector, and through this package we aim to give organisations the certainty they need to plan through next winter.

  • Alan Brown – 2023 Parliamentary Question on Energy Costs for the Struther Farmhouse Tea Room

    Alan Brown – 2023 Parliamentary Question on Energy Costs for the Struther Farmhouse Tea Room

    The parliamentary question asked by Alan Brown, the SNP MP for Kilmarnock and Loudoun, in the House of Commons on 9 January 2023.

    Alan Brown (Kilmarnock and Loudoun) (SNP)

    The energy profits levy measures are predicted to bring in £56 billion and most of that money is coming from Scotland, yet businesses across Scotland are left struggling, particularly in the hospitality trade. The Struther Farmhouse Tea Room in my constituency is facing a 500% increase in its gas bill, with its gas and electricity up by £25,000 in a year. Despite what the Minister says, these businesses are now reaching a cliff edge because Government support is estimated to be a maximum of £2,000 against these increases. How many small businesses and jobs does he think will be lost under the guise of Government fiscal prudence?

    James Cartlidge

    I know that the Scottish National party struggles to understand the basic concept of fiscal prudence, but let me just explain this to the hon. Gentleman. When he talks about the £56 billion, it is not just for the energy profits levy; it also includes the energy generator levy, and we see that money as coming into the UK Treasury from across the UK to support the United Kingdom. It will support businesses in Northern Ireland, as we said earlier, as well as businesses in England, Scotland and Wales. Scotland has benefited from huge support, not just in the pandemic but through the increase in energy costs that has been seen across the United Kingdom. It has benefited from the fact that we are stronger together as a Union supporting every part of our Union.

  • Fleur Anderson – 2023 Parliamentary Question on Energy Costs for Post Offices

    Fleur Anderson – 2023 Parliamentary Question on Energy Costs for Post Offices

    The parliamentary question asked by Fleur Anderson, the Labour MP for Putney, in the House of Commons on 9 January 2023.

    Fleur Anderson (Putney) (Lab)

    The delay in this statement has already left several businesses in Putney to go under. I am now concerned about the post office in Southfields, where the sub-postmistress thinks they will be unable to continue operating. There will be a community cost if post offices across the country go under as a result of the increase in bills. Has the Minister assessed the impact of the energy crisis on post offices? Can he confirm whether they will be included in the cut-back scheme after March? Could he consider a community impact criteria in the scheme so that there will not be a high cost for our communities in Southfields and beyond?

    James Cartlidge

    On the point of going under as a result of the delayed announcement of the results of the review, we were due to announce on the last sitting day before recess, and we have announced on the first sitting day—it is a delay, but not a huge one. In that time, those businesses, whatever they are, will have been benefiting from the current support running until the end of March. We have now given them certainty for the next 12 months with a scheme that remains generous and universal. It is not as generous as before but I can confirm that it will include the sub-post office.

  • Stephen Kinnock – 2023 Parliamentary Question on German and UK Energy Prices

    Stephen Kinnock – 2023 Parliamentary Question on German and UK Energy Prices

    The parliamentary question asked by Stephen Kinnock, the Labour MP for Aberavon, in the House of Commons on 9 January 2023.

    Stephen Kinnock (Aberavon) (Lab)

    I am sure the Minister would agree that a key aim of the support scheme must be to ensure that our steel industry can compete internationally on a level playing field. The German Government have guaranteed their steel industry an electricity price of €130 per megawatt hour for 2023. In contrast, what the Minister has announced today only provides our steel industry with a discount on electricity prices above £185 per megawatt per hour. That leaves UK steel producers to pay an estimated 63% more than their German counterparts. Why are the Government once again letting down our steel industry and forcing our steelworkers to compete with one hand tied behind their back?

    James Cartlidge

    I do not agree about the level of support. I cannot speak for what is happening in Germany, but this remains significantly more generous support for the energy and trade-intensive industries. The hon. Gentleman is right about the figures for this country: the price threshold for the scheme is £99 per megawatt hour for gas and £185 per megawatt per hour for electricity. To be clear, about 60% of the up to £5.5 billion that we have allocated for this scheme would be for the energy and trade-intensive industries. That is more than half of all the funding. It is a significant commitment and includes major manufacturing sectors such as steel.

  • Mike Amesbury – 2023 Parliamentary Question on Businesses Such as the Bulls Head in Frodsham

    Mike Amesbury – 2023 Parliamentary Question on Businesses Such as the Bulls Head in Frodsham

    The parliamentary question asked by Mike Amesbury, the Labour MP for Weaver Vale, in the House of Commons on 9 January 2023.

    Mike Amesbury (Weaver Vale) (Lab)

    What would the Minister say to Mr Uppall, who runs a vital service—a post office—in Hartford, in my constituency? What would he say to the likes of Alison, the landlady of the Bulls Head in Frodsham, also in my constituency, about his rationale and that of the Government in reducing vital support at this particular time?

    James Cartlidge

    The hon. Gentleman is absolutely right to raise the points made by his constituents. As I said to the hon. Member for Brighton, Pavilion (Caroline Lucas), we do understand that the way in which prices have risen has caused great anxiety. In Government, however, we have a duty to consider not only what support we can provide, but the cost to the Exchequer. We have to take that balanced approach. The £18 billion six-month scheme that is currently operational is extremely expensive, and, as I said earlier, stakeholders to whom I have spoken, including those in our major industrial lobbying organisations, did not expect support to remain at its former level because of the huge cost. We have to balance this continued support—which will help the businesses and institutions to which the hon. Gentleman has referred—with the need for fiscal prudence.

  • Jonathan Gullis – 2023 Comments on Energy Bills for the Ceramics Industry

    Jonathan Gullis – 2023 Comments on Energy Bills for the Ceramics Industry

    The comments made by Jonathan Gullis, the Conservative MP for Stoke on Trent North, in the House of Commons on 9 January 2023.

    Jonathan Gullis (Stoke-on-Trent North) (Con)

    The statement will be welcomed by many ceramics manufacturers in Stoke-on-Trent North, Kidsgrove and Talke, but they also want to ensure that they are all eligible. The support to date has meant that £4 million has been saved for one of them, but, sadly, hidden clauses, never used before, are being exploited by some energy suppliers that are trying to smack companies such as Churchill China and Steelite with millions of pounds’ worth of costs on the basis of a past spot price. Will the Minister meet me, other Stoke-on-Trent Members of Parliament and Rob Flello, the chief executive of the British Ceramic Confederation, to look at those examples and hold to account the energy companies which are trying to exploit the Potteries?

    James Cartlidge

    Like my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton), my hon. Friend is a champion for that incredibly important industry in his constituency, and he is right to stress the importance of energy support. I entirely understand that there has been great anxiety about the prevailing level of energy costs, and we hope that this package will provide vital help. According to a message that I have received on WhatsApp, ceramics are dealt with in SIC codes 23.1, 23.2, 23.3 and 23.4 and, I think, one more. As for my hon. Friend’s other request, of course I would be happy to meet him to see what more we can do, because this is an important sector for him and, indeed, for the rest of the United Kingdom.

  • Jack Brereton – 2023 Comments on Energy Bills for the Ceramics Industry

    Jack Brereton – 2023 Comments on Energy Bills for the Ceramics Industry

    The comments made by Jack Brereton, the Conservative MP for Stoke-on-Trent South, in the House of Commons on 9 January 2023.

    Jack Brereton (Stoke-on-Trent South) (Con)

    Energy-intensive industries, particularly the ceramics industry in Stoke-on-Trent, have been most exposed to global energy price shocks, as they have to fire their wares at over 1,000°C. Many of those businesses have not been eligible for the support received by other energy-intensive sectors. Can the Minister reassure me that all ceramics producers in Stoke-on-Trent will receive the additional support that they need?

    James Cartlidge

    My hon. Friend is a champion for the ceramics sector, and I know how important it is to the Potteries and to his constituency. If he looks at SIC code 23 in the list of sectors, he will see a range of ceramics industries that are covered. It is worth looking at that list, because there are a great many specific types. Obviously we want to support business as far as possible. As I have said, the qualification for support is for the sector in question to be above the 80th percentile for energy intensity and the 60th percentile for trade intensity, and that is likely to cover much of the ceramics sector.