Energy Prices: Energy-intensive Industries

Earl Russell Excerpts

Tuesday 6th May 2025 Lords Chamber

[The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath)]

My Lords, I of course recognise the challenge that high energy prices pose for UK businesses. I am very well aware that the Urgent Question in the Commons related to a ceramics company in the potteries, Moorcroft. Let me say at once that my thoughts are with all those workers affected, and I know that Ministers are working very hard with the company and the industry to talk through some of those issues.

I say to the noble Lord that the structure we have in relation to energy prices is the same as the one his Government left when they left office last July. We know that the main reason why we have high energy prices is our reliance on international gas and oil markets, which related back to the shock to the system from Putin’s invasion of Ukraine. We believe as a Government that the faster we move to decarbonise, the more we can provide energy security and cheaper energy, and that this is the best way to go forward. If anything came from the previous Question about the advice of the Climate Change Committee, it is that we cannot afford to let go or slow down in relation to climate change. We do not have that luxury; we need to press on.

[Earl Russell (LD)]

My Lords, our industrial energy prices are too high and our transition to net zero must not come at the cost of specific industrial sectors. The Minister has noted that the original Question in the Commons was in relation to our pottery industry. It is clear that the energy supercharger is helping, but what more can be done to make sure that it is helping all our industries? It is also no secret that the Government are looking at energy market reform in our domestic sector, so can the Minister say what action is being taken to help with industry’s energy costs? What thoughts have the Government had about setting up a permanent independent body to advise the Government on the complex matters involved in the energy market reform policy?

[Lord Hunt of Kings Heath (Lab)]

My Lords, the noble Lord is of course right to refer to the energy supercharger: £470 million is being contributed towards helping companies which are major energy users. Obviously, we look at the scheme and at whether any changes should be made, but as regards energy market reforms, we are certainly looking at a number of issues in relation to the electricity market. We are looking at issues to do with zonal pricing and the rebalancing of the cost of electricity and gas. But these decisions are not easy and there will be gainers and losers, so we have to take this very carefully. The ultimate answer to the noble Earl’s question is that we need to decarbonise as quickly as possible. That will give price stability and certainty to industry.