UK Gas Market

Edward Miliband Excerpts

Monday 20th September 2021 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

I thank the Secretary of State for his statement and agree that we should not be alarmist on the issue of security of supply, but I fear his statement was much too complacent on the price and economic impacts of the current situation.

First, on continuity of supply, we support the Secretary of State taking all necessary measures to ensure that families and businesses continue to have access to energy and that we secure the issue of CO₂ supplies. The Secretary of State says that there are mechanisms in place to ensure that customers of failing companies get taken on, but the scale of the problems in the market will provide an unprecedented test of those mechanisms, so does he believe that taxpayer support will be necessary to deal with the problem? If it is, we must ensure value for money. I welcome his caution about outcomes that lead to taxpayer subsidy for big companies to further concentrate their market share, but can he therefore explain the alternatives and what he proposes happens to the customers of suppliers that do not get through this crisis? He is making a statement later this afternoon, and it would be good to know what he is going to say.

Secondly, on the impact of price rises on businesses and industry, can the Secretary of State set out his plans to support businesses, particularly energy-intensive industries? Has he considered with his colleagues the provision of Government support, including possibly loans, to help businesses facing difficulties? On consumer support, he is right to keep the price cap in place—it is a measure I have long supported—but the rise in the price cap of £139 means half a million more families will be plunged into fuel poverty. At a minimum, he should be looking at making the operation of the £140 warm home discount automatic and possibly extending it, but even that will not be enough. Families are facing a triple whammy: rising energy prices, national insurance rises, and, at the end of this month, the £1,000 cut in universal credit. These energy price rises turn the indefensible decision on universal credit into an unconscionable one. If he really wants to put consumers first, if he really wants to help working people, and if he really wants to tackle fuel poverty, is it not time, even at this late stage, to cancel this terrible decision on universal credit?

Thirdly, we need to learn longer-term lessons from this crisis about the lack of resilience in our energy system that has contributed to very large price spikes. The Secretary of State is right that there are global issues, but the UK is facing particular difficulties. Let me give some examples of Government decision making. In 2017, the gas storage facility, Rough, then 75% of our storage, was planned for closure. The Government could have acted to keep it open but did nothing. Our lack of gas storage was raised by industry, the GMB union and the Chair of the Business, Energy and Industrial Strategy Committee in 2019, my hon. Friend the Member for Leeds West (Rachel Reeves). A Minister said in reply that

“the UK’s gas system is secure and well placed to respond effectively to unexpected changes in supply and demand”.

Were the Government not, then as now, far too complacent on the issue of gas storage?

Next, energy efficiency could significantly cut the demand for gas, but we have had the fiasco of the green deal followed by the fiasco of the green homes grant and then the delayed heat and buildings strategy, and emissions from buildings are today higher than in 2015. When is the Secretary of State going to have a proper retrofit plan?

Our new nuclear programme is stalled, and while the Secretary of State is right that we have made progress on renewables, the truth is that we need to go further and faster, with a more diverse supply. Above all, there is not yet enough of a clear plan from Government for how we meet net zero with affordability and security. People have read what the Climate Change Committee said in its most recent progress report this summer:

“It is hard to discern any comprehensive strategy”.

Is not the truth that there is a direct line from the delay, dither and failure to the issues we face today?

I therefore urge the Secretary of State in the midst of this crisis to use this autumn’s net zero strategy—delayed—the net zero review, also delayed, and the comprehensive spending review to finally put in place a proper plan. Households, businesses and energy suppliers are looking to the Government for support and direction as we face this crisis; it requires not words but action and delivery. It is long past time for Government to get a grip.

[Kwasi Kwarteng]

I apologise, Mr Speaker, for issuing such a lengthy statement.

The right hon. Gentleman talks about a plan, but we have plans and strategies galore. We have the energy White Paper, which was widely well received and which I was very happy to present as Energy Minister, and we also have the Prime Minister’s 10-point plan. I was struck by the fact that when former US Secretary of State John Kerry came to the UK he publicly said that the UK’s plans for decarbonisation were more advanced than those of any other country.

The right hon. Gentleman has a legitimate concern about vulnerable customers, and I have made it very clear to the industry and to Ofgem that they are absolutely our No. 1 priority. We are looking at the warm home discount. As a Government, we have always focused on protecting the vulnerable and people in fuel poverty, and we will continue to do so.

--- Later in debate ---

[Kwasi Kwarteng]

It is not for me to comment on Russian energy policy or strategy here, although we can speculate about its motives. My job, and that of the Government, is to ensure that, whatever Russia does, we have security of supply and can protect our most vulnerable consumers. That is exactly what we are doing.

[Edward Miliband]

On a point of order, Mr Speaker.

[Mr Speaker]

Is it relevant to what has just happened?

[Edward Miliband]

Yes, Mr Speaker.

To follow on from the point made by the right hon. Member for Forest of Dean (Mr Harper), I submit that it really is not good practice for the Secretary of State to come to this House and say that he will make a joint statement with Ofgem this afternoon to set out the Government’s next steps, but refuse to tell Members what is in that joint statement. The point of his coming to the House is for him to be questioned on Government policy—including policy to be announced this afternoon.

[Kwasi Kwarteng]

Further to that point of order, Mr Speaker. I am happy to answer the right hon. Gentleman. He will appreciate that this is an extremely fast-moving and dynamic environment. As of 4.32 today, we have not finalised the statement, so it would be premature of me to make an announcement right now. There will be subsequent House of Commons events—we have oral parliamentary questions tomorrow and I am to appear before the Select Committee on Wednesday—so we can discuss these issues in full detail in the next few days.