Fossil Fuels and Cost of Living Increases

Caroline Lucas Excerpts

Wednesday 11th January 2023 Westminster Hall

[Caroline Lucas (Brighton, Pavilion) (Green)]

I beg to move,

That this House has considered fossil fuels and increases in the cost of living.

It is a pleasure to serve under your chairship, Sir Robert, and to open this important debate on fossil fuels and increases in the cost of living. As we start 2023, households up and down the country are facing extraordinarily difficult circumstances, as we all know from our constituency mailbags, thanks to the cost of living scandal that Government policy has too often exacerbated rather than alleviated. Hikes in energy bills mean that over 9 million people—18% of the population—spent Christmas in the cold and damp, unable to heat their homes, and facing a new year with little respite, with experts warning that high gas prices are here to stay.

At the same time, the climate emergency is deepening and accelerating. Last year marked a year of extremes. It was the UK’s hottest on record, with the average temperature topping 10°C for the first time and the summer’s scorching heat made 160 times more likely by the climate crisis. It is clear that something is fundamentally wrong here, yet shockingly, I note that the climate and energy crises were entirely absent from the Prime Minister’s priorities that he outlined last week.

Fossil fuels are at the very heart of both the cost of living and the climate crises, choking our precious planet while subjecting families to sky-rocketing bills. Weaning ourselves off fossil fuels holds the key to not just ensuring a safer planet for future generations but creating warm and comfortable homes, bringing down bills and guaranteeing a supply of abundant green energy to deliver the transition to a zero-carbon economy. The bottom line is that, for a safe and prosperous future, we need to keep fossil fuels in the ground.

I want to look more deeply at the cost of living crisis that is facing so many of our constituents. As the Minister will know, households are already struggling to cope, with almost 60% of people saying that their financial situation has deteriorated over the past year. The Resolution Foundation has warned that 2023 will be “groundhog year”, with further cuts to living standards. Indeed, even with the support announced by the Government last year, a staggering 7 million households will still be in fuel poverty this winter, rising to 8.6 million from April, with the most vulnerable hardest hit.

It is profoundly shocking that one third of people with disabilities live in cold, damp homes and that a quarter of those with health conditions that are exacerbated by the cold cannot afford to heat their homes to a safe standard. This comes with serious health risks and puts further pressure on our severely under-resourced health service, which, as we all know, is already in serious crisis. In my Brighton, Pavilion constituency alone, there are several thousand people living with a cardiovascular or respiratory condition whose health is at risk if they cannot afford to put their heating on. It is genuinely astounding that the Government are planning on cutting the amount of support available to the most vulnerable households next year, just when bills are set to increase again, reducing support by 10% from £1,500 to £1,350. Will the Minister commit to addressing that gap? Will he seriously consider providing further support for those vulnerable households, given that bills are set to increase by 20% from April?

[Patrick Grady (Glasgow North) (SNP)]

I thank the hon. Lady for giving way and congratulate her on securing the debate. I have heard many similar testimonies from constituents, particularly over the festive period, including from young people who wrote to me as part of the Warm This Winter and Parents for Future campaigns. I heard heartbreaking stories of children seeing their breath in the morning and not being able to recover from colds and coughs because they cannot keep their houses warm. I fully agree with the calls she makes. Those people also recognise in that correspondence the climate crisis and the need, for example, to not start new oil and gas exploration, which the Scottish Government have this morning announced a presumption against. We have to find alternative, cheaper, cleaner, greener ways of keeping warm.

[Caroline Lucas]

I thank the hon. Gentleman for his intervention and join him in paying tribute to Warm This Winter, which has done fantastic work in gathering those case studies and presenting them to us. I congratulate the Scottish Government on their announcement this morning about a presumption against more fossil fuel exploration, because we know that getting more new fossil fuels out of the ground is driving both the climate crisis and—ironically, at a time when gas is nine times more expensive than renewables—the cost of living crisis.

[Wera Hobhouse (Bath) (LD)]

The Government seem to have no money for working people, yet when it comes to fossil fuel companies they have been able to find—from somewhere—£13.6 billion since the Paris agreement. To give the Rosebank oilfield £500 million in taxpayers’ money is a disgrace when families face immense pressures. Does the hon. Lady agree that it is time for oil and gas subsidies to be phased out once and for all?

[Caroline Lucas]

I thank the hon. Lady for her intervention, and she will not be surprised that I entirely agree that fossil fuel subsidies should go. Indeed, that has been said at several of the big climate global conferences—the conferences of the parties. There is supposed to be an agreement on getting rid of the subsidies, but we are certainly not leading by example, sadly.

I want to speak about prepayment meters, although I will come back to the subject of Rosebank. One of the ironies about Rosebank is that most of the oil extracted is for export in any case; we cannot even argue that it is doing anything to help us here at home. However, there is something serious going on with prepayment meters, and I am particularly alarmed by their forced installation. We have seen stories in the press, for example, of mothers returning home to find that meters have been installed while they were out. Locksmiths have come in and people have forced their way into homes to install prepayment meters. Not only that, but magistrates have been approving hundreds of warrants to install meters in just minutes—496 warrants in three minutes and 51 seconds, to be precise.

Prepayment meters should not be installed by warrant, and they certainly should not be approved en masse in such a manner, with no consideration of individual cases and individual vulnerabilities, but when I asked what assessment the Government had made of the impact on vulnerable people of the batch approval of warrants, I was shocked to receive an answer stating that

“the information which must be provided to the court is identical in each case”.

In other words, it makes no difference whether cases are considered individually or together, but that represents total disregard for individual people’s welfare and extraordinary complacency regarding the failings of the system. Surely the Minister sees that if magistrates are not provided with adequate information, they are unable to make informed decisions that take into account people’s vulnerability.

In answer to another question I asked, the Minister simply tried to pass the buck to Ofgem, but given that the Government have the power to implement a moratorium on the forced installation of prepayment meters by court warrant, that, frankly, does not wash. The forced installation of prepayment meters is hugely distressing; it is an invasion of privacy.

Will the Minister commit himself to introducing a much-needed ban and to putting an end to the intolerable situation in which vulnerable people are forced on to higher rates, which brings with it the added risk of self-disconnection? Citizens Advice has reported a significant increase in the number of people it sees who cannot top up their prepayment meters each month—from 1,119 in November 2021 to 3,331 in November last year. Forcing people on to prepayment meters quite simply should not be happening, which is why the ban is needed so urgently.

I want to emphasise that the difficulties facing households are not inevitable. Ministers are fond of blaming those difficulties on President Putin’s illegal invasion of Ukraine, with the Chancellor pointing to what in his autumn statement he called

“a recession made in Russia”.—[Official Report, 17 November 2022; Vol. 722, c. 855.]

While that is true in part, blaming it entirely on President Putin is, frankly, dishonest. The crisis is one of political choices—choices that have been made not just over the past 12 months, but during the past 12 years of Tory rule. As we now know, the decision by the Conservatives, under David Cameron’s regime in 2013, to cut the so-called green crap has added billions to household energy bills, with installations of loft and cavity wall insulation subsequently falling off the cliff by a staggering 92% and 74% respectively in 2013.

Indeed, while there were 1.6 million installations of loft insulation, for example, in 2012, that dropped to just 126,000 the following year. Installations of cavity wall insulation dropped from 640,000 in 2012 to just 166,000 in 2013, and in 2020 there were just 72 installations of loft and cavity wall insulation combined. That is a damning indictment of the Government’s approach.

The poor state of the UK’s inefficient housing stock meant that in June last year households at energy performance certificate band D or below were effectively paying what has been called an inefficiency penalty of about £900 on average per year. It is frankly unforgiveable that in response to the current crisis the Government have once again overlooked and paid insufficient attention to the importance of energy efficiency. Their own Climate Change Committee expressed regret in November that it was now

“too late to introduce new policies to achieve widespread improvements to the fabric of buildings… this winter.”

For almost a year, the Government refused to act on what was the cheapest and quickest way to cut energy bills and address the UK’s notorious leaky houses. This is nothing short of a scandal, and it is also such a wasted opportunity, because ending our society’s addiction to fossil fuels also brings with it an opportunity to create warm, decent homes for everyone, where households are not shackled to high energy bills or trapped in dank and draughty homes, unable to turn the heating on.

[Alyn Smith (Stirling) (SNP)]

The hon. Lady is making an excellent speech, as she always does, and I could not agree more on the importance of energy efficiency. Does she also agree that those who are off grid and reliant on heating oil have the most to gain from piling into renewables and greater energy efficiency, because it would lower housing costs and increase climate efficiency?

[Caroline Lucas]

I thank the hon. Member for his intervention and I entirely agree. I worry that people who are off grid in that way are essentially being hung out to dry. They are not being given the support they need, and they are some of the most vulnerable.

I am pleased that the Government have finally seen sense and committed to £6 billion of new funding from 2025 to 2028, but this is too little, too late for people who are struggling to stay warm right now and who will face the same situation next year. What is more, it is still not clear what that £6 billion will be used for, so can the Minister explain what exactly it will be allocated to? Is it for the establishment of new schemes or the continuation of existing ones such the social housing decarbonisation scheme?

Will the Minister also confirm when we will get more details about the energy efficiency taskforce? For months, I and many others have called for a nationwide, street-by-street, local authority-led, home energy efficiency programme to genuinely insulate households from high bills for the long term. It really is not rocket science. Just last week, the Environmental Audit Committee, of which I am a member—I am very pleased to see the Chair, the right hon. Member for Ludlow (Philip Dunne), with us this morning—released a new report calling for what we called a national “war effort” on energy saving and efficiency, with upgrading homes to energy performance certificate C or above to be treated as a national priority.

That would deliver a massive benefit to our constituents. Citizens Advice estimates that upgrading all UK homes to EPC C would save households nearly £8.1 billion a year at current prices. UK homes are notoriously leaky. They lose heat three times faster than those in other parts of Europe, which means that our constituents are more vulnerable to high global gas prices than their neighbours.

[Peter Grant (Glenrothes) (SNP)]

Like my hon. Friend the Member for Stirling (Alyn Smith), I congratulate the hon. Member on securing this debate. She is referring to the appallingly bad standard of insulation in the United Kingdom’s homes. I do not know if she is old enough, but I remember protesting as a student in the 1970s against a new nuclear power station at Torness on the east coast of Scotland. Even at that time, it was identified that if the money that it would cost to build a nuclear power station had been spent on insulating homes and buildings, the energy saved would have been significantly more than Torness could produce. Does she agree that the short-sighted, almost religious zealot-like fascination with nuclear power in the United Kingdom has been damaging our energy prospects for a great many years and has got to stop?

[Caroline Lucas]

I thank the hon. Member for his intervention, with which I agree 100%. The nuclear obsession is using vast amounts of money, diverting attention and also sending mixed signals to investors, who really do not know what kind of energy future this country is planning for itself. It is a massive white elephant. Nuclear power stations are not coming in on budget and on time anywhere, and the idea that we can now achieve that here in the UK, against all the evidence in so many other countries—and, indeed, against the evidence here at home with Hinkley, for example, which is massively over budget and massively late—beggars belief.

[Philip Dunne (Ludlow) (Con)]

I, too, congratulate the hon. Lady on securing this debate, and on her important contributions to our deliberations on the Environmental Audit Committee. Just before getting diverted on to nuclear, she mentioned the importance of the energy efficiency taskforce, on which I completely agree with her. Does she agree that when the Government choose to respond to the report we published as a Committee earlier this week, which she mentioned, it would be most helpful if they took this opportunity to clarify what the taskforce’s terms of reference and primary objectives will be, so that it can be used as a Government-inspired device to accelerate this national mobilisation of energy efficiency, which we all agree needs to be undertaken?

[Caroline Lucas]

I thank the right hon. Gentleman for his intervention and his kind words. I absolutely agree: the taskforce has a real potential to make a difference, but we are still in the dark about many of the details. If the Government gave us more information, it would give a lot of comfort to a lot of people to know that there is a guiding mind that will ensure we accelerate these urgent installations of energy efficiency.

I turn to oil, gas and fossil fuels. Just as it was political choices that led to families being unable to heat their homes, so was it a political choice by the Government to protect the oil and gas companies, whose profits have grown fat from the spoils of war. As households struggle to make ends meet and our planet burns, the Government have chosen to double down on the very thing that is at the heart of these multiple crises. The UK is set to grant more than 100 licences to explore for more oil and gas in the North sea. Although the windfall tax has been increased to 35%, bringing the total tax on oil and gas to about 75%—I note, in parentheses, that that is still lower than Norway’s, at 78%—it is genuinely incomprehensible that the Government have failed to remove what is being called the gas giveaway, which means that oil and gas companies will still be able to claim £91.40 in tax relief for every £100 invested. What is more, from 1 January, a company spending £100 on so-called upstream decarbonisation—essentially reducing emissions from the process of extracting oil and gas, which of course then goes on to be burned—is now eligible for £109 relief on every £100 invested. In other words, we are paying the oil and gas companies to do the decarbonisation that they should be paying for. They are not broke; they are literally saying that they have more money than they know what to do with. I suggest that they start actually paying their own way.

New oil and gas extracted from the North sea will neither deliver energy security nor bring down bills, but will inevitably come at huge cost to the taxpayer. The hon. Member for Bath (Wera Hobhouse) mentioned Rosebank, the UK’s largest undeveloped oilfield. The costs to the taxpayer if it goes ahead are enormous. At triple the size of the neighbouring Cambo oilfield, if Rosebank is developed it would produce more emissions than 28 low-income countries combined, or the carbon dioxide equivalent of running 58 coal-fired power stations for a year. It is estimated that if it is developed, its owners would receive more than £500 million of taxpayer subsidies, as the hon. Lady said, thanks to the investment allowance—the gas and oil giveaway—in the energy profits levy. If that £500 million were not used for those subsidies—subsidies to burn our planet more—it could be used to extend free school meals to every child whose family receives universal credit. It could be used to pay the annual salaries of more than 14,000 nurses or build one new medium-sized hospital. It is genuinely baffling that the Government think that that is the best use of £500 million at any time, let alone now.

The Minister may try to argue that the development is required because the UK will continue to need gas in the future, but he knows as well as I do that 90% of Rosebank’s reserves are oil, not gas, and that it is likely to be exported, given that that is the fate of 80% of the oil that is currently produced in the UK. There are currently more than 200 oil and gas fields already operating in the North sea whose production would be entirely unaffected if Rosebank were not to go ahead, so this is not about immediately turning off the taps, as Ministers like to suggest. It is not legitimate for the Government to justify new oil and gas licences by saying they are needed. That does not reflect the reality of the situation. I know that, and I think the Minister does too.

It is patently clear that a crisis caused by gas cannot be solved by more gas. As the International Energy Agency clearly states in its “World Energy Outlook 2022”:

“No one should imagine that Russia’s invasion can justify a wave of new oil and gas infrastructure in a world that wants to reach net zero emissions by 2050.”

As a first step, the Government must scrap the so-called gas giveaway—the huge subsidy to the climate criminals who have benefited from Putin’s illegal war. Next, they must urgently work to end the age of fossil fuels for good, because time is not on our side. The Environmental Audit Committee report, which has been referred to, recommended that the Government consult on setting a clear date for ending new oil and gas licensing rounds in the North sea. Given that we are, in the words of the United Nations Secretary-General, António Guterres,

“on the highway to climate hell with our foot still on the accelerator”,

personally I think the time for consultation has gone. Will the Government explain exactly how new oil and gas licences are compatible with limiting global temperatures to 1.5°, when there is overwhelming evidence to the contrary?

The Climate Change Committee noted:

“An end to UK exploration would send a clear signal to investors and consumers that the UK is committed to…1.5°C.”

Furthermore, now that the Government have resurrected the Energy Bill, will the Minister use this opportunity to legislate for an end to the maximising economic recovery duty—a woefully outdated obligation to maximise the economic recovery of petroleum, which can have no place on the statute books of a country that has any real climate ambition? Instead of that duty to maximise the economic recovery of petroleum, will he look at the need to effect a real, just transition for workers and an orderly managed decline of the oil and gas industry? Will the Government also fully harness the potential of renewables, which at the latest contracts for difference auction were at least nine times cheaper than gas?

I welcome the concessions on onshore wind made in the Levelling-up and Regeneration Bill, but the Minister will know that a number of barriers still remain, not least the lack of targets and the strategy for this cheap and popular form of energy. Will he now also address those issues?

[Philip Dunne]

The hon. Lady is being generous with her time. I may pre-empt what she was about to come on to. In concluding her remarks on alternative renewable energy sources, will she commend to the Minister the work the Government have already done in allowing contracts for difference to be available to tidal energy systems, to provide renewable baseload electricity supply, which at the moment is a critical shortcoming in the plans?

[Caroline Lucas]

I certainly welcome that intervention and agree entirely on welcoming the use of the contracts for difference mechanism. Tidal has huge potential and that is one way to maximise that. As the right hon. Gentleman knows, we will be looking this afternoon in the Environmental Audit Committee at ways in which we can unblock more solar power, for example, by enabling the batteries, alongside household solar, to be installed retrospectively at lower VAT rates. It is odd that, at the moment, there are reductions on VAT for solar panels but not for the batteries for households that want to store energy.

[Wera Hobhouse]

On that point, does the hon. Lady agree that the Government should seek to incentivise further private domestic installation of solar panels or ground-source heat pumps by considering an offsetting of the investment against income tax?

[Caroline Lucas]

I thank the hon. Lady for that proposal, which is not one I have looked at, but which sounds interesting. I would be interested to know what the Minister thinks of that.

I will bring my comments to a close simply by saying that, in responding to the multiple crises that I have set out this morning, it is important that we do not store up more problems for the future. Rather than harking back to the fossil-fuel era, I ask the Minister one more time if he will finally prioritise the quickest and cheapest way to bring down bills for the long term, and introduce that desperately needed street-by-street home insulation programme. Again and again, we have seen Government schemes that are not working. The green deal scheme and green homes grant both collapsed and did massive damage to supply chains, with businesses unable to have confidence in what the Government were introducing.

We urgently need an end to the fossil-fuel era, which was kickstarted by coal and colonialism. Instead, we need resilience for the long term, with good green jobs in every constituency, warm homes that are not vulnerable to global gas prices, and the abundance of renewable energy with which these nations are blessed. Only then can we avoid future energy crises, create a more prosperous society and ensure that everyone shares in a transition to a zero-carbon economy.

[Sir Robert Syms (in the Chair)]

I remind Members to bob if they wish to be called in the debate.

--- Later in debate ---

[The Minister for Energy and Climate (Graham Stuart)]

I congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing this important debate and I thank the other hon. Members who have taken part for sharing their constituents’ thinking on fossil fuels and the cost of living.

However, listening to quite a lot of the contributions to the debate, I felt as if we were in some sort of parallel universe, away from the reality of the world we live in today. Three quarters of our energy comes from fossil fuels. That is the reality now. The cost of living crisis is driven by a global shortage of fossil fuels, which is driving up their price. We are moving faster than any other G7 country to decarbonise, which no one would have understood from listening the contributions from those on the Opposition Benches. We led the world in passing legislation for net zero, and in putting in place the Climate Change Committee and the rest of it to keep the Government honest on the route to getting there, which is a tough one.

The reality is that this economy, like every developed economy, is dependent on fossil fuels today, and it will be all the way through to 2050 on net zero, when we will still be using a quarter of the gas that we use today and we will still need oil products. That is the context, which people just absolutely would not have got a glimpse of from the contributions by Members on the other side of the Chamber today. We heard them all pat each other on the back on their ideological opposition to nuclear and their objection to a source of baseload energy that is clean—for what reason? We heard an absurd world view, co-ordinated between the SNP, the Greens and His Majesty’s Opposition. Frankly, it is bizarre. Get real about where we are actually at.

To talk, as the hon. Member for Glenrothes (Peter Grant) did, about the crisis and its impact on the most vulnerable people in his constituency and not be honest about the context or the need for oil and gas in the meantime, and not to engage with the fact that producing oil and gas from our own waters with ever-higher efforts to reduce the emissions from that production, is simply wrong. And for the hon. Member for Bristol East (Kerry McCarthy) to say that it is laughable to suggest that burning domestically produced gas with much lower emissions attached to it, when we must burn gas and we will be doing so under net zero in 2050, is somehow not the right thing to do is, again, frankly absurd.

I hope to return to my actual speech, but I must address the reality of the impact on ordinary people and the most vulnerable. Those people are ill-served if we do not recognise the actual realities of the economy and society that we live in today and, instead, just pose to the public in a kind of virtue signalling.

The hon. Member for Lancaster and Fleetwood (Cat Smith) totally condemned every action by this Government, as though nothing the Government have done has helped in the journey to net zero or in tackling climate change. This Government have done more than any other and taken action on the woeful situation on energy efficiency in homes. We are still way behind where we need to be, but where were we in 2010? I will tell people where we were: just 14% of homes had an energy performance certificate of C or above. If people want something risible or laughably poor, that is it. What is that figure today? Forty-six per cent. We heard nothing but condemnation from the hon. Member for Bristol East, who spoke for the Opposition, about the “shambles” of this Government’s policy. Well, under our policy, we have moved from 14% to 46%.

This Government are committed to setting up an energy efficiency taskforce—further details will be coming soon—precisely to deal with the points that my hon. Friend the Member for St Ives (Derek Thomas) was so right to raise. His contribution was grounded not in the unreal parallel universe presented by Opposition Members but in a real understanding of his constituents in Cornwall, their homes and the rules and barriers that stand in the way of those people being able to have more energy-efficient homes. Those rules and barriers need to be identified and removed to ensure that those people who can and will invest themselves to green their homes are better able to do so.

That is what we need—practical, focused, real and honest engagement with the challenges. People have to accept the wider context, and they have to recognise what this Government have done after the woeful performance previously, which can be seen in all the numbers. Where were we on renewables in 2010? Practically nowhere. Where are we now? Leading Europe. I did not hear that in a single contribution from the Opposition Members who say they care so much about this issue, but care insufficiently to share any of the vital facts.

[Caroline Lucas]

I thank the Minister for giving way. I want to say how utterly disappointed I am by the tone that he has taken. I think that we have all been pretty constructive this morning. We have given the Government credit where some progress has been made, but the Minister cannot stand there and pretend that either the green deal or the green homes grant were successful—we know that they were a disaster. He cannot keep going back to 2010 and suggesting that somehow history was frozen at that point. Any other Government would probably have done a hell of a lot more than this Government have since then.

The suggestion that we are virtue signalling, when we are the ones who are saying that our constituents are living in freezing homes right now—some are actually dying from hypothermia—in a country that exports more energy than it uses, is intolerable. Why is the Minister suggesting that we are on the wrong side when we say that gas is eight or nine times more expensive than renewables? That is what is hurting our constituents. Will he really stand there and defend the Rosebank oil development? That is for export; even if we do get more oil and gas out of the sea ourselves, it does not necessarily get used here, and Rosebank certainly will not be used here. Will he address that point and some of the other real points that we have been making this morning?

[Graham Stuart]

I thank the hon. Lady. The cost of living crisis is because of the global position on the price of gas, driven by supply and demand, as every market is. She speaks as if there is a switch, and a wilful failure by people in my position to press the button that ends all fossil fuel. We hear careless suggestions—“From your friends in the City of London to your friends in the oil and gas industry”—as if there is some button we have not pressed. That is not true. This economy, like every developed economy, is dependent on fossil fuels, and it is a transition to get out of that. Pretending it is not does not serve those people who are suffering as the hon. Lady said.

The Government are driving a reduction in our demand for fossil fuels, and we have achieved a lot on our road to net zero already. Between 1990 and 2019 we grew the economy by 76% yet cut our emissions by 44%, decarbonising faster than any other G7 economy. But oil and gas will remain an important part of our energy mix, and that needs to be recognised. People should not suggest that there is some button that we are wilfully failing to press. We cannot switch off fossil fuels overnight and expect to have a functioning country. If we do not have a functioning country, we will have more people who cannot afford to heat their homes properly. That is the reality, and I do not think that has been properly reflected by Opposition Members today.

Supporting our domestic oil and gas sector is not incompatible with our efforts on decarbonisation when we know that we will need oil and gas for decades to come. What is laughable is to suggest that it is somehow morally superior to burn liquid natural gas imported from foreign countries, with much higher emissions around its transportation and production, than gas produced here. Why would we want to do that?

--- Later in debate ---

[Graham Stuart]

As we know, the price of oil and gas has gone up, and hopefully it will go down again and become more affordable. Scotland is an integral part of this United Kingdom, which is why the hon. Gentleman is present in this United Kingdom Parliament. That is why we are in it together. That is how we are able to support Scottish households and families through the power of the Exchequer and the Treasury of this country, which, as he knows, provide much higher levels of public expenditure and support the Scottish nationalist party to take credit for every single penny spent, a large part of which is able to be spent only because of Scotland’s participation in this United Kingdom. We are in this together.

Hon. Members raised the idea that oil and gas firms are being subsidised, but we have raised the level of tax. I think £400 billion has come so far from the oil and gas companies. They are not being subsidised when we encourage them—

[Caroline Lucas]

Of course they are.

[Graham Stuart]

A reduction in tax from a level that is way above that which any other type of company pays in this country is not a subsidy, and anyone who suggests it is is dealing in semantics and not helping. Hon. Members can say they want to tax those companies higher, and they can say, “I absolutely do not want to encourage them to electrify their operations offshore and reduce the emissions around their production,” but they cannot say we are subsidising them.

Even when our net zero targets are met in 2050, we will still need a quarter of our current gas demand. As we have seen, constrained supply and dramatically increased prices do not eliminate demand for oil and gas. We will still need oil and gas, so it makes sense for our domestic resources to retain the economic and security benefits. Most importantly, hon. Members should look at what we are doing in the North sea basin. We are transitioning, but we will need all that offshore expertise. We need the engagement of the major oil players, which have now made commitments to their journey to net zero. We want them to produce the oil and gas that we will be burning for decades to come here in a green way.

We want to retain those 120,000 jobs. We want to retain the people with subsea and platform knowledge, because we will need that for carbon capture and storage, hydrogen and the transition to the green economy. Again, it is an absolute betrayal not only of the interests of those workers in Scotland and elsewhere but of our transition to suggest that there is a kind of brake. It is a transition, and we are moving through it. Thanks to the Climate Change Act and the carbon budgets, we are on track to reduce demand.

That is another point: hon. Members talk as if oil and gas exploration drives the world’s use of oil and gas, but it does not; the demand side does that. Petrol cars need to be filled, which is why we are encouraging electric cars. Methane-burning boilers demand gas, so we need to replace them with heat pumps and green our electricity system. It is the demand side that we need to focus on. I just think the whole conversation nationally has been focused on how oil and gas exploration drives usage, but it does not. Putting the price up massively and having a shortage does not massively drop usage because we are so dependent on this stuff. We are moving as fast as we can to get ourselves off that dependency, and we are leading the world in doing so.

Through our COP presidency, we have encouraged the rest of the world to follow us. Just 30% of global GDP was covered by net zero pledges in 2019, when we took on the COP presidency, and it is now 90%, so the world is following us. We are leading on those policies. We are a world leader in tidal, which was mentioned. I am delighted that we have now been overtaken by China in offshore wind, but we are the leader in Europe. We transformed the economics of it thanks to our contracts for difference—the mechanisms that this Government put in place. The truth is that this country has done comparatively a fantastic job. The data shows—notwithstanding the sometime mis-steps in energy efficiency—that, overall, our performance compared to what came before has been transformative,

I look forward to the energy efficiency taskforce, my colleague Lord Callanan, and a co-chair who will soon be announced taking these matters forward and listening to colleagues’ practical, proper suggestions on everything from getting the right balance between conservation and installing energy efficient windows to looking at issues such as solar installation on homes, planning and other aspects. We are working together on all those things and also ensuring that we take an holistic approach around our coast as we make plans and aim to ensure that we have a strategic spatial understanding of the North sea and its role in the transition.

This country is doing a fantastic job, and the vision for the future is that we should be an exporter of electricity. I hope to see us being an exporter of hydrogen. I see us as being potentially able to export, as it were, our carbon storage capability to our European friends and allies, and recently I was delighted to witness the signing of a memorandum of understanding on North sea co-operation with all the other countries involved in the North sea. That shows that we are working constructively with our EU allies.

On so many fronts, this country—and this Government, I am proud to say—is doing a brilliant job in leading the world in understanding the importance of getting to net zero, in tackling the reality of the transition from our dependence on fossil fuels, and on the need to keep producing those things in the greenest manner possible while doing everything we can to drive down demand, because it is the demand signal that we need to eradicate, rather than worrying about whether Rosebank, Cambo or anything else goes ahead. We have ensured through the climate change checkpoint that we look closely at that, and I am confident that our approach is compatible with the journey to net zero.

[Caroline Lucas]

Several of us around the Chamber have said that the vast majority of the energy extracted from Rosebank is for export, so will the Minister stop pretending that it will somehow address any of the crises that we face in the UK? He has painted a picture suggesting that none of us on this side of the Chamber has talked about the demand side. The vast majority of what all of us have been talking about has been energy efficiency, which is precisely about reducing demand. Will he start to address some of the points that I made in my speech, and which many other hon. Members did too?

For example, will the Minister address the issues around prepayment meters? Will he address whether there will be a much ramped-up energy efficiency programme? Will he address the questions I asked about how the £6 billion will be used? Will there be more money coming? Lots of questions have been asked in a constructive spirit—believe me, we could have been an awful lot less constructive if we had chosen to be—and I would be grateful if the Minister did us the courtesy of answering them.

[Graham Stuart]

rose—

--- Later in debate ---

[Caroline Lucas]

I thank hon. Members for their contributions to the debate. I also thank the Minister, although for most of his response he misjudged the tone of the room. We were genuinely trying to find areas where we can move issues forward, particularly as they affect our constituents.

On energy efficiency, we know it is win, win, win. It gets people’s fuel bills down, addresses the climate emergency, creates jobs and, as many have said, it would also solve many of the health problems faced by people living in cold and damp homes. I hope the Minister will take away serious acknowledgement of the fact that the Government need to do more on that subject.

He prayed in aid the Climate Change Committee several times. It was that Committee that expressed regret last November that it was now too late to introduce policies to achieve widespread improvements in the fabric of buildings for this winter. On the points he made about fossil fuels, we are not going to agree but it would help if we spoke the same language. For example, the Minister spoke about us making up the idea that the Government subsidise fossil fuels. If he looks at the definition of a subsidy used by the International Monetary Fund and the OECD, he will find that what the Government do is classified as a subsidy. We can have that debate, but to suggest that we are simply barmy for suggesting that that is a subsidy is not helpful.

The Minister talked of our better standards when extracting our oil and gas. He will know that most of our imported gas comes from Norway, which has lower production emissions than the UK. A bit more honesty about the situation would go a long way. No one is suggesting that we turn off any switches or buttons on oil and gas overnight. We recognise that cannot happen. We also recognise that, for as long as the Government have a duty to maximise economic recovery of oil and gas, continue to subsidise oil and gas, and plan 100 new programmes in the North sea, the problem is exacerbated not addressed. I urge the Minister to look seriously at some of the proposals that many of us have put forward this morning and to act on them.

Question put and agreed to.

Resolved,

That this House has considered fossil fuels and increases in the cost of living.