Energy Prices: Support for Business

Jacob Rees-Mogg Excerpts

Thursday 22nd September 2022 Commons Chamber

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on Government support for businesses facing rising energy prices.

[The Secretary of State for Business, Energy and Industrial Strategy (Mr Jacob Rees-Mogg)]

I am delighted to make a statement, Mr Speaker. As you know, I am a great believer that this House should be informed first. I was unaware of any precedent of a statement being made on a day set aside for taking the Oath, and therefore unaware that your generosity would have allowed such a statement to be made. I point out to the House that, in my membership of the House, a statement has not been made by the Government during the taking of the Oath days set aside, nor was any statement made in 1952 on the last occasion when the Oath was taken. I apologise to you, Mr Speaker.

[Mr Speaker]

In fairness, conversations would help to overcome any of these difficulties.

[Mr Rees-Mogg]

That is why I am saying that I am very grateful, Mr Speaker. I always think it is important that this House gets to know, and your generosity in setting a precedent where statements can be made on the days set aside for taking the Oath is, I think, a good one.

It is vital that businesses have the support that they need to pay their energy bills this winter. His Majesty’s Government are determined to grow the economy. We cannot do that if business becomes insolvent thanks to what is tantamount to blackmail by a malevolent state actor. His Majesty’s Government announced yesterday that they will provide a discount on wholesale gas and electricity prices for all non-domestic customers, whose current gas and electricity prices have been significantly inflated by global energy prices. That includes all UK businesses and covers the voluntary sector, such as charities, and the public sector, such as schools and hospitals. The scheme will apply to fixed contracts that have been agreed on or after 1 April 2022, as well as to deemed variable and flexible tariffs and contracts. It will be applied to energy usage for six months from 1 October until 31 March next year.

As with the energy price guarantee for domestic customers, in order to benefit from the scheme, customers do not need to take action. The discount will automatically be applied to their energy bills from 1 October. In terms of real-world savings, non-domestic users will start to see the benefits of the scheme in their October energy bills, which are typically received in November. The level of price reduction for each business will vary depending on its contract type, the tariff and the volume used.

We will publish a review of the operation of the scheme in three months to inform decisions on future support after March 2023. The review will focus in particular on identifying the most vulnerable non-domestic customers and on how the Government will continue assisting them with energy costs beyond the initial six-month period.

A parallel scheme—based on the same criteria and offering comparable support, but recognising the different market fundamentals—will be established in Northern Ireland. For those who are not connected to the gas or electricity grid, equivalent support will be provided for non-domestic consumers who use heating oil or alternative fuels instead of gas. Further detail on this will be announced shortly.

[Jonathan Reynolds]

I welcome the new ministerial team to their posts.

The energy crisis poses a severe challenge to businesses of every size, many of which have been desperate for clarity and reassurance. While the Conservative party spent much of the summer distracted by its own internal drama, the Opposition spent that time arguing that the crisis demands a response commensurate with the scale of the challenge, paid for by a windfall tax on the excess profits that have accrued because of Russia’s illegal invasion of Ukraine.

While I welcome the Government’s damascene conversion to freezing energy prices, we must all acknowledge that for too many companies the news will have come too late to save them. Businesses cannot plan on speculation and briefings. It is regrettable that a Minister who respects the role of Parliament chose to avoid parliamentary scrutiny, instead opting for a sparse press release and a short media interview. That is why the Opposition have tabled this urgent question: to get the much-needed clarity on these plans that businesses desperately need.

May I ask the Secretary of State what, specifically, the review after three months will be looking at and what the criteria will be for determining whether to extend the support? Secondly, how will the taxpayer be protected from energy traders inflating prices, knowing that the Government will be picking up a substantial slice of the costs come what may? Thirdly, what support will the Secretary of State be offering to businesses in the long term to protect themselves from rising energy costs through efficiency measures and the transition to renewable energy?

I also ask the Secretary of State to address the elephant in the room: who is paying for this? The Government say that they cannot cost this package, but it is clearly expensive. This Government say that they can cut taxes, increase spending, increase borrowing and magically pay for it through the higher growth that, after 12 years in office, has completely eluded them. This is fantasy economics. It is a threat to British businesses and to the financial stability of the country. What can the Secretary of State say to reassure the country that these plans are robust, responsible and fair, as well as being sufficient to get us through the crisis and better protect businesses in the long term?

[Mr Rees-Mogg]

Although we have been away for a few months and had a leadership election, the socialist record does not change. Tax, tax, tax and tax again—it is always the answer to every problem.

Let me come to the specifics of the hon. Gentleman’s question. The three-month review is taking place to work out who will need support, to ensure that support is properly targeted. What is being done at the moment is an immediate response to an extreme crisis, to benefit everybody, but not everybody necessarily needs the same level of support. What we will do in the review is work out who needs the support. If I can give some early indications, it seems to me that places such as care homes are likely to need longer-term support. That will be covered by the review.

The hon. Gentleman raises the important question of how taxpayers will be protected. I have asked the Public Sector Fraud Authority to look at all our plans, to ensure that whatever we are doing and our mechanisms for paying are as robust as they can be against the speed with which we need to act. It is really important to safe- guard taxpayers’ money.

We are doing a number of things to help in the futures market. The Bank of England and the Treasury will provide some underlying capital for the futures market so that there is a more reliable futures price, rather than the one set on very low liquidity at the moment. We will legislate in an expedited fashion to ensure that we protect against anybody who commits fraud against this measure.

The hon. Gentleman raises the issue of transition. Gas is a transition fuel. The Government’s commitment to net zero remains, but we will need gas to heat people’s boilers for the immediate future, and we need to get it as cheaply as we possibly can, using all our domestic resources. Beyond that, there are exciting plans for carbon capture and storage and for hydrogen, which I think present a very attractive future for this country.

The hon. Gentleman asks that the scheme be responsible, robust and fair. It is all those things. It is responsible to protect business; it is robust to ensure that it can be rolled out quickly; and it is fair to our economy as a whole.

[Julian Smith (Skipton and Ripon) (Con)]

I welcome my right hon. Friend’s package, which is already having an effect in North Yorkshire—Angus Fire, in the small town of Bentham, emailed this morning to thank him for this rapid intervention—but may I ask how quickly businesses in rural areas such as North Yorkshire will hear of the Government’s intervention for off-grid customers?

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[Mr Rees-Mogg]

I am grateful to my right hon. Friend for his support, and I am glad that businesses in his constituency are already being helped. I also recognise the importance of support for those who are off grid and using fuel oil. That is a specific issue in Northern Ireland, of which my right hon. Friend, as a former Northern Ireland Secretary, has particular experience. We are looking at the comparables, because the heating oil price has not risen by as much as the gas price. We need to be fair to all users, and we are working on that currently.

[Mr Speaker]

I call the Scottish National party spokesman, Stephen Flynn.

[Stephen Flynn (Aberdeen South) (SNP)]

Is it not great to see the Secretary of State in this House, rather than standing in the street filming a statement to the public, surrounded by boarded-up shops and rubbish? What an unedifying spectacle of a man who believes in the pre-eminence of this Parliament—but I am glad he is here, because he has some questions to answer, and it is about time that he did so.

How much does the Secretary of State estimate that this scheme will ultimately cost, including, of course, possible interest payments? Can he confirm that the likes of Amazon will benefit from a scheme that will be built on the back of public sector borrowing? Perhaps most important, can he explain to energy users in Scotland—energy-rich Scotland, where we produce more oil and gas than we can possibly consume and gas accounts for just 14.4% of electricity generation—why Westminster has failed us so terribly badly?

[Mr Rees-Mogg]

What was it that P.G. Wodehouse said about it not being too difficult to discern the difference between a Scotsman with a grievance and a ray of sunshine? So often SNP Members come here on Thursday mornings with a grievance. It is rather like old times, is it not, Mr Speaker, when I would have an hour on Thursday mornings to discourse with the Scottish nationalists about their general grumpiness. I see that that is one of the constants of British politics. The hon. Gentleman referred to rubbish in the streets of Westminster; let me point out to him that as soon as an administration turns from Conservative to socialist, the rubbish piles up in the streets—as I think it has also been doing under the SNP in Edinburgh.

This scheme is fair to taxpayers and will provide support across the country. As I said, there will be a review in three months to ensure that that support goes to the people who need it most.

[Holly Mumby-Croft (Scunthorpe) (Con)]

I thank my right hon. Friend for the discussions that he and I have already had about steel. He clearly understands the industry extremely well, and I am very grateful to him. Can he confirm that energy-intensive industries will be at the forefront of the Government’s mind when we reach that point of review?

[Mr Rees-Mogg]

Yes, indeed. We are having meetings with British Steel, which will be a beneficiary of the scheme. It is important that we do not burden business in this country in a way in which it is not burdened overseas: we must support great British businesses.

[Stephen Kinnock (Aberavon) (Lab)]

Following the question from the hon. Member for Scunthorpe (Holly Mumby-Croft) about steel, may I point out that the energy-intensive industries require co-investment and partnership with Government in order to make the transition to cleaner, greener ways of making steel? Can the Business Secretary confirm that he is committed to co-investing with Tata Steel and our other steel makers to enable that transition to take place, and will he agree to meet the all-party parliamentary group for steel and metal related industries—which I am proud to chair—to set out the Government’s plans for this vitally important foundation industry?

[Mr Rees-Mogg]

I am grateful to the hon. Gentleman, and I agree with what he says. We are in discussions—my officials are in discussions—with Tata Steel. I should be happy to meet the hon. Gentleman at any time, and I make the same offer to all right hon. and hon. Members. I think it proper for Secretaries of State to make themselves available in response to all reasonable requests for meetings from Members on both sides of the House.

[Mr Mark Harper (Forest of Dean) (Con)]

May I press my right hon. Friend on the position of off-grid consumers? About 40% of my constituents are off the gas grid, as is the case for a similar number in the Prime Minister’s constituency, so this is very important. The factsheet updated yesterday suggested that only £100 was going to be provided to such consumers. That does not seem to provide a comparable level of support. Will he update us on when we will have more information? Secondly, do the electricity companies have an accurate database of exactly which customers are on the gas grid and which are not, so that they are able to make those payments?

[Mr Rees-Mogg]

On the second point, people either have a gas meter or they do not, so that is relatively straightforward. As regards the first point, the price of heating oil has not risen as much as the price of gas. The aim of Government policy is to ensure equivalence, and therefore, inevitably, the support given for those on heating oil will be a lower actual amount than that for those connected to the gas grid—but that will give them equivalence.

[Ian Mearns (Gateshead) (Lab)]

An aspect of this that has not really been talked about is the gas and energy consultancy companies. My constituency has a higher than average proportion of the energy consultancy companies based in the wider north-east region, and they are feeling the impact of the energy crisis really hard. Hundreds of energy consultant jobs have been lost in Gateshead in the past month alone, leading to an exodus of expertise and innovation, which will further harm business in the future. The Government’s announcement of a cap on energy prices for the next six months does nothing to promote market competition between suppliers, and leaves brokerage and consultancy companies sidelined. Businesses will ultimately need to return to the market to improve energy contracts, if they are to survive throughout 2023, unless of course the Government intend to change the market model. What plans do the Government have to repair the energy market in 2023 and, importantly, to support those businesses in the north-east in the meantime? Or is it going to be more a case of devil take the hindmost?

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[Mr Speaker]

Order. The hon. Gentleman has to learn to ask a question, not make his own statement.

[Mr Rees-Mogg]

I wonder whether the hon. Gentleman might like to apply to the Backbench Business Committee for a debate on the subject.

The reason we are going for a cap on the wholesale price is so that the market should remain as open as possible, and therefore there should be opportunities for discussions with companies as to the right level of price at the retail level and all that goes between the wholesale and retail level for the non-domestic sector. I hope that is helpful to the hon. Gentleman.

[Steve Brine (Winchester) (Con)]

May I ask the Secretary of State to clarify a point about park home owners in Winchester, who obviously live under one business owner—the park home owner—and people who live in homes of multiple occupation under one business owner? They were left wondering for a long time about the £400 rebate previously announced by the Government. Where do they stand in respect of this new energy price guarantee? Are they being treated as businesses? If so, they are being treated as business units, not domestic units, which is of course what they are.

[Mr Rees-Mogg]

I am grateful to my hon. Friend for asking an important question on something that constituents of all of us will be concerned about. We will legislate to ensure that the cut in prices is fed through to residents. Therefore, people running park homes or mansion blocks will have to pass on the benefit. That will be a legal requirement. As we look to the review, I think that it is very straightforward to assume that park homes and mansion blocks will be at the forefront of those who need continued support, because they are residential rather than business users.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

Orkney and Shetland already have the highest levels of fuel poverty in the country. We have no access to the mains gas grid, which means that so many more of my constituents rely on heating oil. This morning my constituents are being quoted £1.22 per litre for heating oil. It is pretty clear that the market in heating oil has failed. Why are the Government not acting now to bring heating oil within the price cap mechanism?

[Mr Rees-Mogg]

The right hon. Gentleman says that the Government are not acting now, but that is not entirely accurate. The Government are acting now to include heating oil. As I have said, heating oil has not risen as much as gas. Obviously, we are working on the basis of the evidence available, and we are looking at the heating oil price.

[Jason McCartney (Colne Valley) (Con)]

I very much welcome this statement. Across my constituency there are many small businesses, such as play gyms, gyms and cafés, in former textile mills. Because they pay one fee for everything, all in, how can we make sure that their landlords pass on the benefit of this programme?

[Mr Rees-Mogg]

We will legislate so that landlords are obliged to pass on the cut in wholesale prices.

[Marsha De Cordova (Battersea) (Lab)]

There is still a lack of clarity on the Government’s energy support package for non-domestic users. Businesses, faith groups and voluntary organisations in my constituency are especially worried about the potential cliff edge in April next year. It is not viable for those organisations to plan on six-month timelines, so they need more clarity and certainty about the scheme. Will the Secretary of State set out what criteria will be used for those organisations? Who will qualify for further additional support come next April?

[Mr Rees-Mogg]

That is exactly what the review will cover, and it will be published in plenty of time for 1 April.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

Obviously, across the House we welcome this package. We have seen many similar packages across Europe, but there has been much further debate in Europe about how to constrain demand, particularly on the part of industrial users. We cannot subsidise consumption without also trying to reduce demand, because otherwise we will cause immense risk of blackouts come this winter.

[Mr Rees-Mogg]

The price signal remains very strong. Even with this support, prices have risen significantly and it is fair to assume that non-domestic users will be rational actors in the market.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

To prevent households being locked into years of fuel poverty, Plaid Cymru is urging the Government to bring forward a street-by-street insulation programme, to be paid for by a higher windfall tax on oil and gas companies. Businesses also need support with energy efficiency measures so that they, too, can permanently reduce their energy bills. Will the Secretary of State meet me to discuss the proposal from the Federation of Small Businesses for “help to green” vouchers, which would support small and medium-sized businesses to afford energy-saving products and services?

[Mr Rees-Mogg]

It will be a pleasure to meet the right hon. Lady to discuss these matters. The Government are committed to helping people with insulation projects. That is an important part of the Government’s strategy, and she is right to raise it.

[Miriam Cates (Penistone and Stocksbridge) (Con)]

This support will be very much welcomed by businesses in my constituency, and particularly by high-energy users such as the steel industry, which has suffered from uncompetitive energy prices for years. As welcome as this short-term help is, will my right hon. Friend confirm that he is looking at a long-term steel strategy to ensure that our UK manufacturers can compete in the long term?

[Mr Rees-Mogg]

I am in entire agreement with my hon. Friend. It makes absolutely no sense to make British industry uncompetitive against global industry.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

It saddens me to remind the House that we now have a Secretary of State for Business, Energy and Industrial Strategy who has never worked in industry or business—[Interruption.] He is an investment banker.

May I tell the Secretary of State that small firms, and big firms, in Huddersfield will go bust due to the cost of energy this winter? Has he seen the front page of the Financial Times? This is a crisis for our country, especially in manufacturing. When will he do something and wake up to his responsibility to get out there in the country and talk to manufacturers?

[Mr Rees-Mogg]

I think it is the hon. Gentleman who needs to wake up and pay attention to what has been announced.

[Justin Tomlinson (North Swindon) (Con)]

For many businesses, including Jungle Kingdom in my constituency, solar panels are a way to make a significant, tangible difference in the long term, but they cannot secure the permission of their landlord. What measures can be considered to make it work for both parties?

[Mr Rees-Mogg]

My hon. Friend raises an important point. Landlords and tenants need to work together to try to ensure that efficient sources of energy are achieved. Normally it will be in the interests of a landlord to have solar panels applied, particularly if the tenant is volunteering to pay for them, so I think this is something where the market can probably find an answer.

[Cat Smith (Lancaster and Fleetwood) (Lab)]

Many small businesses in the Lune valley and Over Wyresdale in my constituency use heating oil. Although the price has not increased as much or as fast as the gas price, it has still increased exponentially and many small businesses are really struggling to know how they will make ends meet. How soon will these businesses get any clarification from this Government about whether they will still be in business at Christmas?

[Mr Rees-Mogg]

Heating oil is an important issue, for the hon. Lady’s constituents, for businesses and, as I mentioned earlier, for Northern Ireland. It is therefore important that we ensure there is a proper equivalent scheme, and that is what we are doing.

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

Many businesses in my constituency very much welcome these measures. As a number of Members have said, energy-intensive industries, in particular, have borne the brunt of many of the issues we have faced with energy cost rises. So will my right hon. Friend look in particular at industries such as ceramics, at longer-term support and at how we can support them to invest in more efficient and energy-saving technologies?

[Mr Rees-Mogg]

This is a very important point for ceramics, steel and other energy-intensive industries: they want to move to more efficient means of production, and that may require some investment. It is important that the Government help to work on the schemes to ensure that we have vibrant, efficient, profitable and, most importantly of all, globally competitive industries.

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

The Secretary of State’s announcements may have finally put a temporary brake on further terrifying price hikes, but they leave huge questions unanswered, including: what is the Government’s exit strategy? We need a proper solution to get us out of this crisis, by reducing our dependence on gas and upgrading buildings for the long term. Just yesterday, more than 100 top businesses wrote to the Government begging them for support for energy-efficiency and large-scale industrial decarbonisation. Can he explain why these businesses were so conspicuous by their absence in the measures he announced today, and will he remedy that now?

[Mr Rees-Mogg]

The businesses that write can implement their own energy-efficiency measures—that is what businesses do. It is a sensible investment for them, because if they become more energy-efficient, they will save cash on their energy bills. We also need more secure and cheaper supplies of gas, which is why we are going to issue more licences and why we are looking at shale gas. It is really important that people have confidence that gas will flow through the pipes and into their boilers so that they can heat their homes during this and succeeding winters.

[Mark Pawsey (Rugby) (Con)]

At a time when they are facing substantial increases in a key cost of operating, businesses across the UK have welcomed the measures and, in particular, the speed with which the Government have responded. Did the Secretary of State see the remarks made by Kate Nicholls of UKHospitality, who praised the inclusiveness of this scheme, with it bringing in both small and large companies, and drew attention to how this is going to secure jobs in the long term?

[Mr Rees-Mogg]

I am grateful to my hon. Friend for his question. It is fundamentally important that we have a rapid scheme that protects as many businesses as possible, because the increase is so extreme that, on an immediate view of it, it was hard to see any business that would find conditions easy. Therefore, we had to act quickly and universally, and I am grateful for his support and that of the hospitality industry.

[Hilary Benn (Leeds Central) (Lab)]

Will the small charities that are not registered with the Charity Commission be eligible for this assistance? I am thinking of those with an income of less than £5,000 a year that cannot register voluntarily and are not required to do so. Will they get help as well?

[Mr Rees-Mogg]

This proposal will help all non-domestic users, with the only exception being the gas-powered electricity generation operators, which will not get the subsidy for their electricity generation. All other non-domestic outlets will benefit.

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

I welcome this package, which will provide support to businesses and safeguard jobs in my constituency. The current situation is exacerbated by an energy market that does not work and the need for further investment in nuclear and renewables—I am glad that the Government are consulting on the former and investing in the latter. Does my right hon. Friend agree that public and private investment is needed, along with a functioning energy market, to ensure that we never have to face this situation again?

[Mr Rees-Mogg]

Yes, my hon. Friend is absolutely right; we need a better functioning energy market. There are real difficulties with the liquidity in the futures market at the moment. He is also right to say that we need a further and faster roll-out of nuclear energy, which is being worked on, and that offshore wind, which is going at a rapid pace, continues to be a major and growing source of energy within this country.

[Carla Lockhart (Upper Bann) (DUP)]

The Secretary of State has mentioned Northern Ireland several times, highlighting the fact that he is aware that a large number of small businesses there rely on oil for heating their premises. Will he go further than just a throwaway line and confirm that the inadequate and insignificant £100 being offered to households for oil will be reviewed and that the same figure will not be offered to businesses reliant on oil?

[Mr Rees-Mogg]

Two thirds of Northern Ireland households are not on gas. Therefore, it is fundamental to ensure that Northern Ireland is treated fairly and as a full part—as it is—of the United Kingdom. That is an absolute priority for the United Kingdom. Northern Ireland does not have the price cap that applies in Great Britain, therefore we will need to bring forward legislation to deal with the issues in Northern Ireland. We will do that as a matter of absolute priority to ensure that a scheme is up and running rapidly. We are very conscious of the fuel oil issue, which other Members have raised.

[Fay Jones (Brecon and Radnorshire) (Con)]

On heating oil, two thirds of my constituents live off the gas grid. I note what the Secretary of State says about being fair to all bill payers, but I urge him not to fall into the trap of thinking that rural areas are wealthy areas. Fuel poverty in my constituency is a serious problem, and so far the only support that has been announced is £100, which will provide heating oil for just 10 days—it will not touch the sides. I urge the Government to rethink on rural areas and heating oil.

[Mr Rees-Mogg]

I am grateful to my hon. Friend. Representing a rural constituency, I am well aware that there are areas of our countryside that suffer from fuel poverty. It is all a matter of proportionality; that is what we are striving to achieve, to get the balance right.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

A businessman recently contacted my office extremely distressed about the future of his business—he does engineering, and he was talking about closing his doors for good and laying off 50 people. I hope the Minister accepts that the delay in hearing something from the Government has not only caused emotional distress but had an impact on the local economy. Companies are not making decisions on future investment in their workforce or their business because they are not sure that they have a future. Bearing that in mind, will the Minister offer greater reassurance by giving businesses long-term support to improve their energy efficiency?

[Mr Rees-Mogg]

A very significant package of support has been announced and brought forward as early as practicable. I mentioned that a review will take place, and the point of that review is to work out who will be in most need of that support.

[Tom Hunt (Ipswich) (Con)]

I very much welcome this package of support for business, as I welcomed the support for domestic users. However, I was contacted yesterday by Alan, a resident of Orwell Quay, who said he had experienced a 300% increase in the service charge for heating the communal areas. He wanted to know whether the Government have a plan to support leaseholders in places such as Orwell Quay in Ipswich.

[Mr Rees-Mogg]

We will legislate to ensure that the reduction in the wholesale cost is fed through to people in mansion blocks or whose energy is bought centrally and who are then charged through a service charge. That will be a fundamental part of these proposals.

[Alison Thewliss (Glasgow Central) (SNP)]

Calder Millerfield in my constituency has been quoted a 345% increase in its electricity costs alone. Although I appreciate the Secretary of State’s plans to help in the next six months, what can he offer Calder Millerfield after the end of that six months? A 345% increase just in electricity costs could put this business under.

[Mr Rees-Mogg]

The hon. Lady raises the issue of these extraordinary, large rises, which concern MPs on both sides of the House. That is why we have brought forward this package. I am trying to give as much reassurance as I can without pre-empting the review. As I said, we have introduced this measure on a completely broadbrush basis because it is the right thing to do at the moment—it is needed urgently. However, we need to examine in a review exactly who should benefit, and then announce that in plenty of time for 1 April. In that way, we can see what support is needed for the longer term.

[Simon Jupp (East Devon) (Con)]

Many businesses in East Devon have already welcomed the support outlined by my right hon. Friend. However, as he well knows, the hospitality industry in particular will need targeted support after that six-month period. Will he commit to continue to work with the industry and the all-party parliamentary group for hospitality and tourism, which I chair, on a wider package that will help pubs and cafés survive after six months?

[Mr Rees-Mogg]

I am very happy to consider representations to the review from my hon. Friend and others regarding specific industries.

[Chris Bryant (Rhondda) (Lab)]

The trouble with announcing a measure that only lasts six months is that local authorities are, quite responsibly, putting together their budgets for next year now. My local authority has said to me that, because it runs swimming pools, leisure centres, care homes, schools and so on, not renewing this for next year would be the single biggest blow to its finances in 50 years and it would have to start laying people off pretty sharp. Will the Secretary of State make sure that local authorities are given plenty of advance notice of how their budgets can be protected for the next financial year?

[Mr Rees-Mogg]

I have laid out when the review will be and that we will give as much notice as we can prior to 1 April.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

I thank my right hon. Friend for his statement, which I know will be welcomed across Newcastle-under-Lyme both in our hospitality industry and at the brickworks in Chesterton, which is energy intensive. Does he agree that we must not be in this position again in the future—indeed, western Europe must not be in this position again—and that that will require investment not only in diversifying our energy but in storage? What will his Department do to work on energy storage?

[Mr Rees-Mogg]

My hon. Friend is right: we must not be in this position again. That is why we want to ensure that we maximise our own domestic sources of energy and look at long-term contracts with friendly nations across the world that are fundamentally more reliable. Yes, there is a great deal more to do, and storage is something that we are looking at.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The Scottish Licensed Trade Association has said of the Government’s plans that

“when you look beyond the headlines it doesn’t live up to the hype, as this new scheme caps the wholesale price and pubs and bars could still be paying 200%-300% higher bills than normal.”

The newly and extensively restored Foundry pub in Inverness had to close its doors a few weeks ago, citing energy costs as a key reason, during the Tory leadership vacuum. Does the Secretary of State accept that what he is offering businesses is too little, too late and does not last long enough?

[Mr Rees-Mogg]

No, I would not characterise it in that way at all. I would simply say that, if Scotland were independent, it would not be able to afford to do any of this.

[Virginia Crosbie (Ynys Môn) (Con)]

Anglesey is known as energy island. We have wind, wave, solar and hydrogen power and, hopefully, new nuclear at Wylfa, yet we have one of the lowest gross value added rates of any constituency across the UK. Can my right hon. Friend reassure my constituents that this package will help protect their jobs and bring much-needed new employment, investment and skilled jobs to Anglesey?

[Mr Rees-Mogg]

I would be extremely keen to see that happen. I would add that Ynys Môn has a very high-energy dynamo as a Member of Parliament.

[Mr Clive Betts (Sheffield South East) (Lab)]

I want to follow up on the question of my hon. Friend the Member for Rhondda (Chris Bryant) about the position of local authorities. Come December, the Secretary of State for Levelling Up, Housing and Communities will make a spending announcement for local authorities for next year. Does the Secretary of State for Business, Energy and Industrial Strategy agree that his review of energy costs should be incorporated into that, so that local authorities get one presentation of what the future will look like rather than myriad different ones not joined up together?

[Mr Rees-Mogg]

The hon. Gentleman is rather looking a gift horse in the mouth. This is providing a very significant reduction in energy prices for the next six months and a review will take place to see what happens next. Local authorities would be in a very difficult financial situation if this were not being done. The Government cannot responsibly commit to unending expenditure; it has to be done in a sensible and prudent fashion.

[Greg Smith (Buckingham) (Con)]

I warmly welcome the package of measures that my right hon. Friend has set out. As the number of questions this morning has indicated, the one area that needs more detail and, dare I say it, polish is off-grid support. When he looks at the detail of that for businesses and households, I urge him not to treat it as one, but to look at the disparity in pricing between oil and liquefied petroleum gas, which have very different costs bases and need to be treated separately.

[Mr Rees-Mogg]

My hon. Friend is right: LPG and heating oil have not risen as much as natural gas. None the less, it is important to make sure that there is fairness for everybody, bearing in mind that some houses, and indeed some schools, still depend on coal for their heating.

[Munira Wilson (Twickenham) (LD)]

Yesterday’s announcement provided very little certainty for schools and other public services; it simply pushed the cliff edge back by six months. Schools in my constituency are already facing difficult decisions about cutting support staff. They also need help cutting energy usage. This Government shut down the school energy efficiency loan scheme, which helped them to buy insulation, solar panels and so on. Is it not high time that the Secretary of State looked at reopening that scheme?

[Mr Rees-Mogg]

On the first point, we are providing considerably more certainty than would otherwise be provided in a fundamentally uncertain energy market. We encourage people to look at ways they can insulate themselves better and are in endless discussions to ensure that we can have the appropriate programmes.

[Gareth Davies (Grantham and Stamford) (Con)]

Businesses across Grantham and Stamford will welcome the support announced this week. Lincolnshire’s farmers in particular face increasing pressure, owing to the rising costs of inputs such as fertiliser and energy. Can my right hon. Friend assure me that he will remain mindful of the particular circumstances farmers face in the design of any future support packages?

[Mr Rees-Mogg]

As I too represent an agricultural constituency, I am very conscious of the needs of farmers, which should be at the forefront of the nation’s care and concern.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

In times of crisis we turn to our civil society organisations to support us with vital services. Across the arts, we are expecting museums, galleries and theatres to provide the public with warm banks. Those critical community and cultural organisations tell me that they face the combined challenges of falling donations and income, rising costs and the continuing impact of covid. What can the Business Secretary tell us to reassure those essential organisations that support for energy costs will extend beyond six months for them?

--- Later in debate ---

[Mr Rees-Mogg]

I think I have already answered the question on what happens after six months. There will be a review, and what is going to happen will be announced well in advance of 1 April.

[Anna Firth (Southend West) (Con)]

I welcome the statement by the Secretary of State, on behalf of the thousands of businesses and charities and the 63 care homes and 30 schools in Southend West. When he comes to his review, will he assure me that he will keep in mind the particular needs of special schools? We have brilliant ones in Southend, particularly Kingsdown School; they look after the most seriously disabled children and their energy needs are much higher due to the feeding pumps and hoists. Will he agree to sit down with me and discuss their special needs when he comes to his review?

[Mr Rees-Mogg]

I would be delighted to discuss that with my hon. Friend. In my own constituency we have the Fosse Way School, a special school that provides a wonderful and caring service to children in very great need.

[Kim Johnson (Liverpool, Riverside) (Lab)]

The Secretary of State has mentioned that there will be support for the voluntary and charitable sectors. In my constituency we have a number of food banks and food pantries that are struggling to keep their doors open as they provide essential services for people forced into poverty. Can the Secretary of State tell us what level of support beyond the six months will be available to that very important sector?

[Mr Rees-Mogg]

I have already answered several times the question of what will happen after 1 April.

[Dr Luke Evans (Bosworth) (Con)]

Businesses in Hinckley and Bosworth will be hugely grateful for the protection the Government have put in place. There is one problem, though: given world events, what is the Government’s assessment of the risk of energy blackouts, and should businesses prepare for them?

[Mr Rees-Mogg]

There is a requirement for a study of that to be provided, and I believe a study on our energy security through the winter will be provided in early October.

[Nick Smith (Blaenau Gwent) (Lab)]

Parts of Blaenau Gwent are 1,200 feet above sea level and our winters can be bitter. Will there be any extra help for families facing higher bills in constituencies with much colder weather than most, and will the Government also look again at the cold weather payment criteria as part of their upcoming review?

[Mr Rees-Mogg]

Cold weather payments are not a responsibility of my Department, but I will ensure that the hon. Gentleman’s comments are passed on to the relevant Secretary of State.

[Joanna Cherry (Edinburgh South West) (SNP)]

Like many other MPs, I have spent the summer visiting small businesses and charities in my constituency. They all say that they need to be able to make forward plans. For example, Four Square, a charity in my constituency, runs a hostel for homeless young people and a women’s refuge, and fundraises through a large retail premises. Soaring energy bills may affect its ability to keep the homeless hostel and the women’s refuge open. It is simply not practical for Four Square to wait three months for a review; it needs action and information on the Government’s long-term plans before three months are up. Will the Secretary of State please seriously reconsider the timing here and listen to the voices across the House urging him to do that?

[Mr Rees-Mogg]

We have acted extremely swiftly to provide support, and it is proper that it should be reviewed to ensure that it goes to the right people. The timeline is completely reasonable. It seems to me that people are looking for things to harp on about in a package that they broadly welcome.

[Clive Efford (Eltham) (Lab)]

Many businesses are negotiating contracts with their energy suppliers now, so what does the Secretary of State have to say to those businesses? Should they negotiate just for six months? What will he do, in all urgency, to prevent the next six months from being a period in which businesses are run down and closed?

[Mr Rees-Mogg]

As I have set out, there will be a review and an announcement, giving people plenty of time for 1 April.

[Rachael Maskell (York Central) (Lab/Co-op)]

Many churches and charities in my constituency will expend more energy over the coming months because they are providing warm banks. What additional support will they be able to apply for so that they can provide the resilience our communities need?

[Mr Rees-Mogg]

This support is comprehensive across the non-domestic sector.

[Ian Paisley (North Antrim) (DUP)]

The Secretary of State has provided the clarity that many companies in Northern Ireland now require, but legislation will now be required to assist businesses. Thousands of businesses in Northern Ireland are small and medium-sized enterprises, and they cannot wait for legislation, so will he commit to an emergency instrument or provision before December of this year?

[Mr Rees-Mogg]

This House, when called upon, can act remarkably swiftly. The intention is that we should introduce legislation in October, pass it by the end of October, and that it should take effect from 1 October, to ensure that non-domestic users in the whole of the United Kingdom are helped, and that everybody in Northern Ireland is helped. That is the broad timeframe, and I hope that the House will co-operate with it, because it is necessary for expedited legislation.

[Florence Eshalomi (Vauxhall) (Lab/Co-op)]

So many big energy companies have posted obscene profits while constituents, businesses, charities and schools across my Vauxhall constituency continue to suffer. As the Government were so reluctant to introduce the windfall tax, will the Secretary of State confirm how they will ensure that the energy companies are compelled to pass the subsidy on to businesses?

--- Later in debate ---

[Mr Rees-Mogg]

Of course, that depends on what the hon. Lady means by “energy companies”, because the domestic suppliers have not been making enormous amounts of money. Indeed, many of them have gone out of business over the last few months, so they have not been making vast amounts of money.

Some businesses have been making a lot of money; they pay very significant amounts of tax already. It is important that we do not assume that there is some honeypot of businesses that can be raided—there is not. We need long-term investment in this country to maximise the exploration and production of oil and gas to ensure that we have lower prices and sustainable businesses. That is not aided by putting taxes on at every opportunity, which the socialists always want to do.

[Barry Gardiner (Brent North) (Lab)]

The domestic scheme is based on a loan to be repaid out of future bills. If the business scheme is to be repaid in the same way, why would businesses not regard it as a deferred tax rise? If it is not, does the Secretary of State really expect it to be repaid out of general taxation by the rest of the taxpayers? “Tax, tax, tax” is what he is saying.

[Mr Rees-Mogg]

Economic growth, economic growth, economic growth.

[Andrew Gwynne (Denton and Reddish) (Lab)]

May I again raise the plight of the hospitality sector? The Secretary of State will know that it went through a tumultuous time during the pandemic, and many small hospitality outlets face extortionate increases in their bills. Those at Howard’s Neighbourhood Bar—a small 60-seat bar in Denton—face bill increases of £2,000 a month, which is just not sustainable for them. Although the support will take them six months down the road, they will be worried about what happens after that. The Secretary of State says that there will be a review, but can he offer a glimmer of hope to businesses such as Howard’s Neighbourhood Bar that they will not face a cliff-edge in six months’ time?

[Mr Rees-Mogg]

The hon. Gentleman asks a fair question. I cannot pre-empt the review, but I think I can offer a glimmer of hope. In the review, we will have to see which companies and other non-domestic users need the greatest support—I have indicated some of them. Without going too far, it seems that the hospitality sector is at particular risk in this area. If he would like to make representations to the review, I will listen to them very carefully.

[David Linden (Glasgow East) (SNP)]

As well as businesses, a number of housing associations have concerns about energy prices. In my small Glasgow constituency I have more than 15 housing associations, many of which have the unique tenement-style properties, which are very difficult when it comes to energy efficiency. Would the Secretary of State be willing to come to Glasgow East and take part in a roundtable with local housing associations to understand the challenges that tenement properties, in particular, face as a result of the energy crisis?

[Mr Rees-Mogg]

The hon. Gentleman, as so often, raises a serious point. We are very conscious of the issues facing social housing landlords, particularly those with rather older housing stock that is the least energy efficient. There are important things to be done to help them make their housing more efficient, and there have been schemes available to do that. I am not sure I can promise a visit, but I would be delighted to discuss the matter with him further.

[Margaret Greenwood (Wirral West) (Lab)]

Care homes in my constituency are facing soaring energy costs, as I am sure the Secretary of State will be aware. Care homes look after frail and vulnerable people, and it is essential that they are kept warm. I note his comments thus far on care homes, but can he assure us that there will be a real focus on ensuring their ongoing financial viability?

[Mr Rees-Mogg]

This is of fundamental concern to His Majesty’s Government.

[Rachel Hopkins (Luton South) (Lab)]

I want to try again on local authorities, because I am not sure the Secretary of State understands that the review is simply too late. Too many councils already face budget holes—Luton Council faces a budget hole of £10 million this year—because of increasing energy costs, inflationary pressures and increasing demands. Has he had any conversations with the Secretary of State for Levelling Up, Housing and Communities about the budget planning process? Local authorities are required to produce medium-term budgets before April next year.

[Mr Rees-Mogg]

The degree of certainty that is being offered is greater than in a normal year. We are saying that what will happen will be announced after the three-month review has taken place, in plenty of time for 1 April. Normally, local authorities are dependent on the vicissitudes of the market.

[Patrick Grady (Glasgow North) (Ind)]

Bars, butchers and other small businesses I have spoken to in Glasgow North are already operating on the tightest of margins. If they go out of business, that has a knock-on effect across the local economy, so the poverty rate spirals up rather than wealth trickling down. What assurances can the Secretary of State give these businesses, rather than simply pushing the cliff edge further down the road?

[Mr Rees-Mogg]

I think we have given a very substantial assurance this morning.

[Liz Twist (Blaydon) (Lab)]

In recess, I met residents at Winton Court sheltered housing scheme in Winlaton, run by Housing 21, and they explained to me how angry they were that they were not benefiting from the domestic subsidy. Can the Secretary of State tell me how he proposes to make sure that those people, most of them pensioners, are not hit by increased energy costs and are in no worse a position than other residents?

[Mr Rees-Mogg]

I am grateful to the hon. Lady, who is such an assiduous campaigner for her constituents. She is absolutely right that we have to ensure that these wholesale price cuts feed through to the people they are meant to benefit, and that will be in our legislation.

[Dame Diana Johnson (Kingston upon Hull North) (Lab)]

Because of the Government’s failure to act quickly on energy costs, Smithy’s fish and chip shop, which had been trading for 38 years on Beverley Road in Hull, had to close its doors. That was not just because of energy cost increases, but because the price of fish has gone up 120% and the price of beef dripping 150%. I would like to know what more the Secretary of State will do to reassure one of the institutions at the heart of our communities—fish and chip shops.

[Mr Rees-Mogg]

I am glad to reassure people about fish and chip shops—the right hon. Lady is right to say they are at the heart of our community—because they will benefit from this universal scheme.

[Carol Monaghan (Glasgow North West) (SNP)]

Businesses in Glasgow North West can literally see the turbines that are producing Scotland’s renewable energy. They are not feeling supported at the moment. Can the Secretary of State confirm that the businesses that are being supported most through this crisis are the energy producers and the gas and oil companies?

[Mr Rees-Mogg]

No, that is a complete misunderstanding of what is happening. We are protecting all non-domestic users, in addition to domestic users. We are protecting businesses, individuals and charities across the country.

[Jeff Smith (Manchester, Withington) (Lab)]

Lots of SMEs in south Manchester are still worried. I make a particular plea for small and medium-sized bakeries, such as Martins and Barbakan in Chorlton in my constituency, which have been in touch with me and are really concerned. Can the Secretary of State assure us that he is in discussion with those kinds of energy intensive small businesses? Those discussions do not have to wait for three months; I hope they are going on now.

[Mr Rees-Mogg]

All businesses will benefit, but obviously, the more energy intensive the business, the more it will benefit from this reduction in wholesale prices. As I said, I am very open to receive representations from right hon. and hon. Members to the review that is taking place.

[Anne McLaughlin (Glasgow North East) (SNP)]

I am a member of the voluntary board of the Scottish Pantry Network, whose shops are significantly affected by rising energy costs. It exists for environmental reasons to stop food waste, but primarily, it exists to provide low- cost, fresh food for people who cannot afford supermarket prices. To keep the food fresh, our shops have walk-in fridges and freezers that cost a lot of money to run. Does the Secretary of State not see that some supermarkets, which my constituents cannot shop in and which are making massive profits, will be helped by this measure, while some of my pantry shops will not be, simply because they signed up to a contract prior to 1 April? Will he remove that date? If not, will he consider including all those non-domestics that signed up to contracts before 1 April in the three-month review?

[Mr Rees-Mogg]

The major price rises in contracts took place after 1 April, which is why that date was set.

[Matt Western (Warwick and Leamington) (Lab)]

For the last 12 years, Conservative Governments have had the chance to act on energy supply and infrastructure. Manufacturing businesses around the country have been saying to me that they are facing a 59% premium against the EU average for electricity. Why did Governments not act sooner, certainly before this energy spike, to ensure the security of UK businesses?

[Mr Rees-Mogg]

It is important for our economy that we have competitive energy prices and that we do not go out of our way to burden British business. I agree: the hon. Gentleman is right to campaign for lower energy prices.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

The energy package announced yesterday is fine—as light as it is and as far as it goes. The Secretary of State has heard widespread concerns about the cliff edge in the support in three or six months’ time. In view of those concerns, will he give further urgent consideration to additional support for energy intensive business sectors, such as manufacturing and hospitality, as well as longer-term support for investing in energy saving measures?

[Mr Rees-Mogg]

I think we have covered most of that already, and the answer is broadly yes.

[Peter Grant (Glenrothes) (SNP)]

The Secretary of State admitted a few minutes ago that we have all known for at least six months that urgent and major Government intervention would be needed. Why has it taken so long? To call on his experience and knowledge of the way things work from his previous post as Leader of the House, who should the House demand come to the Dispatch Box to apologise to our constituents for six months of unnecessary delay?

[Mr Rees-Mogg]

Most energy is used during the winter. We have plans ready for the winter.

[Wendy Chamberlain (North East Fife) (LD)]

In response to an earlier question, the Secretary of State acknowledged the importance of farming, but factories and those involved in food production are also important for food supply, as is certainly the case in North East Fife. Further food inflation will affect struggling families more. Although this short-term energy support is welcome, there are other issues for the sector, such as the cost of fertiliser, labour supply and so on. Will he commit to a cross-Government strategy involving the Department for Environment, Food and Rural Affairs, the Home Office, the Treasury and the Department for Business, Energy and Industrial Strategy to ensure our food supply for the future?

[Mr Rees-Mogg]

The hon. Lady is right to raise what is going on with the cost of living more generally. Energy is an important part of that, and helping to deal with the energy problem will have an effect on price rises throughout the economy. The Bank of England will say something later today, which is another part of dealing with inflation. I accept her analysis that inflation is a very difficult problem for an economy to face.

[Jim Shannon (Strangford) (DUP)]

I thank the Secretary of State for his commitment and help for all the different sectors across my whole community. On Monday, I met a business owner in my community who employs more than 200 people. His is an energy intensive factory business and the cost of energy for a year is a large six-figure sum. He needs help right away to secure those jobs and ensure that the future is secure for him and his company. I ask the Secretary of State to clarify again whether that business owner will qualify for the 50% help toward energy costs, particularly for electricity.

[Mr Rees-Mogg]

I do not know the circumstances of any individual company, but if the company is on mains gas and electricity, it will benefit, and it will benefit from 1 October. In Northern Ireland, both gas and electricity will be almost identical—slightly different for technical differences, but the same in effect—to what is happening in GB.

Shale Gas Extraction

Jacob Rees-Mogg Excerpts

Thursday 22nd September 2022 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy to make a statement regarding the lifting of the moratorium on shale gas extraction.

[The Secretary of State for Business, Energy and Industrial Strategy (Mr Jacob Rees-Mogg)]

What a pleasure it is to be continuing on this theme—

[Dame Angela Eagle (Wallasey) (Lab)]

Get the right page!

[Mr Rees-Mogg]

Indeed, the hon. Lady is right to be saying that I need to find the right page because I am having some difficulty in finding the right page immediately, but do not worry. [Interruption.]

[Mr Speaker]

Order. Is there another copy we can give the Secretary of State? [Interruption.] He has got it.

[Mr Rees-Mogg]

I am very grateful to the right hon. Gentleman for asking his urgent question. I am glad to be able to announce that the moratorium on the extraction of shale gas is being lifted, and a statement about that has been laid before the House.

As I set out in the previous urgent question, it is important that we use all available sources of fuel within this country. It is more environmentally friendly to use our own sources of fuel than to extract them in other countries and transport them here at great cost, both financially and in terms of carbon. It is therefore something we need to revisit, and we need to revisit the seismic limits to ensure that shale gas extraction can be done in an effective and efficient way.

[Edward Miliband]

This is obviously a case of “the dog ate my homework”, and it is hardly surprising. Let us start by taking the Secretary of State’s excuse for lifting the fracking ban—that it will make a difference to the energy bills crisis. It will not, because gas is sold on the international market. The current Chancellor said so in February of this year:

“No amount of shale gas…would be enough to lower the European price”

of gas. In an article published yesterday, even the founder of Cuadrilla said that the Secretary of State is wrong. First, why does he not admit the truth that anyone who knows anything about this subject says his claim that fracking will cut bills is nonsense?

Next, let us come to safety. The 2019 manifesto, on which the Secretary of State and every Conservative Member stood, said:

“We will not support fracking unless the science shows categorically that it can be done safely.”

They are lifting the ban, but they cannot supply the evidence, and the British Geological Survey report published today certainly does not do it. So in the absence of the evidence, his approach is to change the safety limits. He says in his written statement laid before this House that

“tolerating a higher degree of risk and disturbance appears to us to be in the national interest”.

I look forward to him and his colleagues explaining his charter for earthquakes to the people of Lancashire, Yorkshire, the midlands, Sussex, Dorset and, indeed, Somerset who will be part of his dangerous experiment. Let me tell the Conservatives that we will hang this broken promise round their necks in every part of the country between now and the next general election.

The Conservative manifesto also said:

“Having listened to local communities, we have ruled out changes to the planning system.”

Does the Secretary of State stand by that promise, and how will he abide by the Prime Minister’s commitment to local consent? The truth is that he does not understand that we cannot escape a fossil fuels crisis by doubling down on fossil fuels. Renewables are today nine times cheaper than gas. The only way to cut energy bills and have energy security is with zero-carbon home-grown power, including onshore wind and solar, which his wing of the Conservative party hates and he continues to block. For communities in every part of our country, today shows that they can never trust a word this Government say again, and he has shown he is willing to break his promises to support dangerous fringe ideas that put the interests of fossil fuel companies above those of the British people.

[Mr Rees-Mogg]

There was plenty of energy in that, Mr Speaker, but it was, I am afraid, more sound and fury that signifies nothing. We know that shale gas is safe. It is safe in the United States, where it has been one of the biggest contributors to the decline in carbon emissions of any activity that has gone on in that country. We know, even if Labour Members wish to ignore it, that seismic activity of 2.5 and below on the Richter scale takes place millions of times a year across the world. Our standards for ground-level movements for construction work are double those that have ever been achieved by any shale gas exploration in this country. There is a huge margin over what we allow for building work against what has actually happened in terms of shale gas. The right hon. Gentleman seeks to deny the ordinary rules of supply and demand. He ought to be aware that when we increase supply and demand remains steady, that has an effect on pricing, and pricing is always set at the margin. The price of any commodity is set by the final user who demands that commodity. If supply exceeds demand prices fall, and any increase in supply helps to reduce costs.

But there is another point. We have—all of us— constituents with gas boilers, and we are going to have them for many years to come. Do we really want them to be dependent on strange dictatorships that wage war in this world, or do we want to have our own security, and our own supplies? Do we want to maximise what we receive from the North sea and from underneath our feet? This seems to me to be just good common sense. It is safe, it is shown to be safe, and the scare stories have been disproved time and again. The hysteria about seismic activity fails to understand that the Richter scale is a logarithmic scale. It seems to think it is a straight arithmetic scale, which of course it is not. Bringing on the supply will bring us cheaper energy, which we need, and that will help our constituents. It secures our supply, which will ensure that our businesses can continue to operate whatever the weather. This is of such importance, and it is sheer Ludditery that opposes it.

[Mark Menzies (Fylde) (Con)]

There is nothing Luddite about the people of Lancashire or Fylde. I want to say how disappointed I am that Parliament was not informed about this issue before the media was, and that as a local Member of Parliament, I was not given that courtesy, despite having requested information for two weeks by contacting the right hon. Gentleman via his Parliamentary Private Secretary. I have sent letters, I have sent WhatsApps—nothing back. Can we be crystal clear on one thing? At the Manchester hustings—this is a matter of public record and people can find the clip—the Prime Minister made it crystal clear, no ifs, no buts, no caveats, that fracking would take place in the United Kingdom only where there was local consent. That was crystal clear. If the Prime Minister is to remain a woman of her word, and a woman in whom we can believe—and I believe she is—will the Secretary of State outline how that local consent will be given and demonstrated in my constituency of Fylde?

[Mr Rees-Mogg]

My hon. Friend will have heard my right hon. Friend the Prime Minister in her speech on energy on 8 September, saying that we were lifting the moratorium on fracking. I am surprised that he feels he was not informed, because that has been announced.

[Mark Menzies]

With local consent.

[Mr Rees-Mogg]

We obviously want to work with local communities, and it is really important that companies that seek to extract shale gas come up with packages that make what they are proposing to do welcome to local communities. That is of fundamental importance and is what the Prime Minister has set out.

[Mr Speaker]

I call Stephen Flynn, SNP spokesperson.

[Stephen Flynn (Aberdeen South) (SNP)]

There can be no doubt that this particular political earthquake is absolutely bonkers. The UK faces two problems when it comes to energy: energy prices and energy security. Let us be clear that when it comes to energy prices, producing shale gas will make absolutely no difference whatsoever. On energy security, this Government could and should be turbocharging renewables, and creating a contract for difference for hydrogen, to ensure that we have hydrogen boilers in future and are not reliant on the gas boilers of the past. But luckily, in Scotland there will be no change. There will be no fracking whatsoever. We, unlike the Tories, stick to our word. It is great to know that that will not change, but the one thing that will change is that we will be long gone from the shackles of this place by the time shale gas is produced in England.

[Mr Rees-Mogg]

It is amusing to think that the economics of independence were all dependent upon oil and gas, and now they are not going to have any, which does not seem to me to be entirely consistent. Using our national resources is a sensible and wise policy, and that is what this Government are looking to do.

[Sir Desmond Swayne (New Forest West) (Con)]

There has been no moratorium on fracking for thermal energy and it has continued apace at many sites, but the science is the same, is it not?

--- Later in debate ---

[Mr Rees-Mogg]

Except that thermal energy has no seismic limit on it, whereas there was a 0.5 limit on shale gas, which made it almost impossible. That was a policy that was designed to stop any shale gas being extracted.

[Ian Lavery (Wansbeck) (Lab)]

Can the Secretary of State confirm what recoverable reserves of shale gas we have here in the UK? What percentage of global or even national demand would that shale gas be likely to meet, and what impact would that have on the global price of natural gas?

[Mr Rees-Mogg]

We need to get on with the exploration and the test drilling to see how realistic the forecasts are. A report in 2012 set out the potential for shale gas, which is very large, but the question that the hon. Member raises—how much of that will be realistically extractable?—is the right one, and it requires drilling to take place to find out.

[Mr Richard Holden (North West Durham) (Con)]

Obviously, looking to these measures to increase security and supply is incredibly sensible in the long term, not only to get prices down but to deliver energy security. However, for the many constituents of mine still struggling with energy prices now, particularly those off grid, can the Secretary of State outline a few of those measures and say how he intends to go further in offering short-term support?

[Mr Rees-Mogg]

I think we discussed that in the last urgent question, so I will ask my hon. Friend to look at Hansard.

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

I must say that I am fascinated that the Secretary of State thinks that he knows more about the geology of the UK than the geologist who founded Cuadrilla, who said quite clearly that the UK is unsuited to widespread fracking.

My question comes back to the issue of consent. The Prime Minister said that fracking will go ahead only in places where there is support from the local community. That begs the question why on earth the Secretary of State is even pursuing this idea, as there is no support from local communities, but how is he going to measure that, particularly given that this terrible and deeply unpopular decision coincides with the Government’s draconian new anti-protest laws?

[Mr Rees-Mogg]

In relation to Cuadrilla, the gentleman in question I believe left the company 10 years ago, so he is somewhat out of date in terms of the company that he purports to represent. The current management of Cuadrilla are in favour of this.

I think local support is important, and one of the things that companies that want to drill for shale gas will have to do is come up with packages that are attractive to local communities. That will ensure that people get some financial reward from shale gas being extracted near them.

[Ruth Edwards (Rushcliffe) (Con)]

I would like to press my right hon. Friend further on how community support will be defined and measured, because I have many concerned constituents who want to know that they will have a genuine route to rejecting fracking applications that do not have local support, and I am still not clear what that would be.

[Mr Rees-Mogg]

There are parts of the country, particularly in relation to nuclear, where there is local consent and very enthusiastic support for the development of additional energy sites, so it is perfectly possible to measure and see local support.

[Bill Esterson (Sefton Central) (Lab)]

The homes of people living near the proposed fracking site at Altcar Moss shook as a result of the tests that the Secretary of State referred to earlier. He said that shale gas was safe, but his Government paid compensation to residents living near fracking sites in Lancashire. The Government’s own report says that little progress has been made in reducing and predicting the risks. When is he finally going to admit that fracking is a non-starter in this country?

[Mr Rees-Mogg]

In relation to seismic activity, there is no particular dissimilarity to that from mining, and mining is not subject to seismic limits.

[Sir Greg Knight (East Yorkshire) (Con)]

Despite what the Secretary of State said, is it not the case that forecasting the occurrence of seismic events as a result of fracking remains a challenge to the experts? Is it not therefore creating a risk of an unknown quantity to pursue shale gas exploration at the present time? Is he aware that the safety of the public is not a currency in which some of us choose to speculate?

[Mr Rees-Mogg]

Unusually, I disagree with my right hon. Friend. It is all a matter of proportionality. As I pointed out, the movement on ground level from construction is about double that we have had from any instance with shale gas. We know what has happened before. There are not limits on mining. There are not limits on ordinary oil extraction. It is only shale gas that has limits, and there is no evidence that shale gas is worse than any of those other activities. So, I think, on a balance of risks, my right hon. Friend is not coming to the right conclusion.

[Dame Angela Eagle (Wallasey) (Lab)]

It is a bit rich of the self-styled Minister for the 19th century to think that the CEO of Cuadrilla is out of date. The Secretary of State’s manifesto said:

“We will not support fracking unless the science shows categorically that it can be done safely.”

The science has not proved categorically that it can be done safely, so he is reneging on his solemn promise, which all Conservative Members stood on, to the British people in 2019. This is not a legitimate thing for this Government to do, is it?

[Mr Rees-Mogg]

I must reiterate that the former chief executive of Cuadrilla resigned 10 years ago. He does not represent the company and that is important. The House would be put under a misapprehension if it were to think that he is currently involved. As regards the last manifesto, I happily stood on the last manifesto because I had read the 2012 report that went through most of the myths against shale gas and showed that they were wrong and that the extraction of shale gas is safe.

[Scott Benton (Blackpool South) (Con)]

The Secretary of State will be aware of the strong objections many of my constituents have to fracking. The Prime Minister has been quite clear in saying that it will take place only if there is strong local support. However, that poses many questions. What is the local community and how do we define it? How do we ascertain whether it can command local support? What incentives, if any, will be provided to local communities that have fracking imposed upon them? My constituents are understandably anxious about fracking returning to the Fylde coast. When will they receive an answer to some of those questions?

[Mr Rees-Mogg]

My hon. Friend asks a very important question. It is important for the national interest that we have secure supplies of gas—that is important across the House to all constituents—but this will affect some residents much, much more than others. Therefore, it is only right that they are compensated and receive some financial benefit for the inconvenience. The majority of the inconvenience comes not from the extraction of shale gas, but from the building of the shale gas well in the first place and the associated lorry movements. It is important that people benefit and are rewarded for doing something that is in the national interest.

[Jeremy Corbyn (Islington North) (Ind)]

What studies has the Secretary of State undertaken of the effect on aquifers where fracking has taken place, which are deeply polluted and run well beyond the local communities he is seeking support from to reintroduce fracking to this country? Surely, he must understand that the dangers will be here for decades to come—long after whatever small amounts of gas have been extracted? It is future generations who will suffer because of this policy.

[Mr Rees-Mogg]

It is no surprise that I disagree with the right hon. Gentleman. I refer him to the 2012 report, which went through that and through what had happened in the United States for comparison purposes. First, it found the evidence on the pollution of aquifers was not actually any good: most of the stories were invented or were scare stories. In addition, the UK has a very good regulatory regime. The combination of ignoring the scare stories and decent regulation means that one can be confident that aquifers will not be damaged.

[Sir Robert Syms (Poole) (Con)]

I welcome this announcement; it is one of the few from Front Benchers that will actually make us a lot richer, if we pursue it. It will also make us more resilient in a very difficult world. The key seems to be what advantage the communities that may be affected can get through financial support. Has the Secretary of State had any discussions with the Treasury? It seems to me that if local people give their consent, that is in the national interest.

[Mr Rees-Mogg]

I am very grateful: my hon. Friend makes exactly the right point, both ways around. This is in the national interest and will make the country richer, but it is absolutely right that those affected should be rewarded. To my mind, that means direct financial reward, not a theoretical one. The last time that we discussed fracking, the idea was that communities would be delighted if they got £10 for the village hall. I do not think that is the right way to do it. This needs to be direct, to the individuals who are affected. I have had preliminary discussions with my right hon. Friend the Chancellor, but I do not have a formal thing to announce.

[Helen Morgan (North Shropshire) (LD)]

Residents in the northern part of my constituency are rightly concerned about the impact of tremors on their often older buildings, and they are worried about the impact of the extraction of coal bed methane through fracking on their rural way of life. Will the Secretary of State explain in detail—he has not so far—exactly the mechanism through which communities will be able to refuse consent for coal bed extraction and shale gas fracking? Compensation is not consent.

[Mr Rees-Mogg]

Compensation and consent become two sides of the same coin. People will be able to negotiate the level of compensation and it will be a matter for the companies to try and ensure widespread consent by offering a compensation package that is attractive. [Interruption.] Opposition Members howl and wail about this because, actually, we are trying to use market forces. It is amazing—a Conservative Government using market forces!

[Andrew Bridgen (North West Leicestershire) (Con)]

Does my right hon. Friend agree that we should have been fracking our shale gas two years ago? But we are where we are, and the best available time to start is immediately.

[Mr Rees-Mogg]

My hon. Friend says only two years ago—why such a short timeframe?

[Stephanie Peacock (Barnsley East) (Lab)]

The Government’s figures show that only 17% of the public support fracking. In Barnsley, 3,000 people signed a petition against it. There is no local consent in the area I represent. Given that the last round of fracking licences was for Yorkshire, how will the Secretary of State ensure that northern communities are not disproportionately affected by this outdated and dangerous way to create energy?

[Mr Rees-Mogg]

This is definitely not outdated; it is a very effective, modern way of extracting energy. I would say to people: do they want cheaper and more secure energy or not? If the answer is yes, fracking is going to be part of the answer.

[Jerome Mayhew (Broadland) (Con)]

The Secretary of State has repeatedly referenced a 2012 report that identified considerable potential reserves. How significant might those be in achieving energy security?

[Mr Rees-Mogg]

I am very grateful to my hon. Friend; that is an important and fundamental question. The answer is that we need to do the test drilling first to see whether the reserves can be achieved in the way that the 2012 report hoped, but I cannot give a firm commitment on that, because we have not done enough test drilling yet.

[Amy Callaghan (East Dunbartonshire) (SNP)]

To come back to the 2019 Tory party manifesto, which each Government Member stood on, it states on page 55 that a moratorium on fracking would be lifted only if

“the science shows…it can be done safely.”

A change in Tory party leadership is not a change in scientific evidence. Will the Secretary of State enlighten the House as to why the Government think they are above both logic and science?

[Mr Rees-Mogg]

Because all the evidence says that it can be done safely, as it is in the United States, and as the 2012 report that I have referred to many times indicated.

[Michael Fabricant (Lichfield) (Con)]

I have been quite shocked by the luddites on the Opposition Front Bench, who have been quite open in saying that they will weaponise the issue in a general election. For those who fear the unknown, may I tell my right hon. Friend that the 0.5 limit on the Richter scale is nothing compared with the 1.5 limit on the Richter scale that Lichfield is currently enduring from pile-driving for HS2? If we can live with that—though we do not really like living with it, Mr Speaker—we can certainly enjoy the benefits from fracking.

[Mr Rees-Mogg]

My hon. Friend makes an absolutely right and wise point: Opposition Members’ motto for the next election is, “Let’s be cold and poor.” That is really the prospectus that they are putting before the British people. As regards seismic activity, there are millions of seismic events of a magnitude of 2.5 or lower in the world every year. We should not assume that every seismic event is the San Francisco earthquake.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Lifting the cap on bankers’ bonuses while making it harder for working people to access benefits, and now lifting safety limits on seismic events, or earthquakes to you and me, while protecting and subsidising oil companies’ excessive profits and accelerating climate change— does not this decision really show whose side this Tory Government are on?

[Mr Rees-Mogg]

His Majesty’s Government are on the side of people who need energy, businesses that need energy and an economy that needs to grow. The Labour party is in favour of no growth, coldness and high prices.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

The Costa Coffee that I visited on Tuesday morning rivalled the House of Commons Chamber this morning for robustness of debate and strength of opinions expressed. I sought to reassure constituents that they would have the opportunity to have their say because local consent was required. I have been listening carefully to the Secretary of State this morning, but I have yet to hear any explanation of how local consent will be determined; indeed, any reference to local consent has been absent. Let me try once more: will my constituents be asked whether they want fracking, or not?

[Mr Rees-Mogg]

As I have said, and as the Prime Minister has said, we will be looking to have the support of local communities. That is important. There will be a responsibility on companies, when they bring forward proposals, to work out how they can get that local consent. It seems to me pretty clear that that will involve giving money to people to encourage them, because they will want to have the benefit locally while they are doing something that helps the country nationally.

[Hywel Williams (Arfon) (PC)]

In Wales, we know the cost of dangerous fossil fuel extraction so that others can profit remotely. It is particularly acute today on the anniversary of the Gresford mining disaster, in which 266 men and boys were killed, 200 women were widowed and 800 children were left fatherless. The coal mine was owned by the Westminster and United Collieries Group, which subsequently destroyed the safety records. The men killed remain 2,000 feet down—only 11 bodies were recovered—but Gresford was mooted as a fracking site. Will the Secretary of State confirm that he understands that powers on fracking remain with our Senedd, and that he has no intention of trying to return those powers to Westminster?

[Mr Rees-Mogg]

I am not seeking to upset the devolution settlement.

[Craig Mackinlay (South Thanet) (Con)]

Even before Putin’s illegal war in Ukraine, fracking had advantages because of the benefits for jobs, for investment, for tax revenues and for the positivity of the balance of payments, which I would rather were accruing here in the UK instead of our sending tens of billions to Qatar and other places. Is my right hon. Friend aware of the carbon dioxide savings from domestic energy supply? It has been calculated that 5 million tonnes of CO₂ are emitted just from the cooling, declassification and transport of liquefied natural gas. That has to be a moral outrage.

[Mr Rees-Mogg]

My hon. Friend is absolutely right, and he takes his argument through logically, unlike many Opposition Members. If we wish to reduce carbon emissions, we are better off using gas as a transition fuel that comes from our own resources, rather than importing it. That must be true: we have those resources, we need the transition fuel, and therefore we should try to extract it domestically.

[Jon Trickett (Hemsworth) (Lab)]

Today’s panicking, Trumpian announcement has been brought about by the failure of successive Tory Governments who squandered the opportunity that coal, oil and gas—our indigenous resources—offered to transform our economy into a carbon-free economy. Will the Secretary of State confirm that on his target list for fracking are areas in Yorkshire and elsewhere in the north which are often described as “red wall”, and may I bring to his attention the fact that there is no local consent in those areas for what he is proposing this morning?

[Mr Rees-Mogg]

It will be important for the companies that wish to extract gas to ensure that there is local support, and to come up with packages that ensure that it is forthcoming. It is important for local communities to welcome the extraction of shale gas, and I think it very likely that they will.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

When we are faced with a Russian leader who uses gas supplies as a tool of warfare, it is entirely prudent to examine again the viability of all our domestic energy resources, but may I encourage my right hon. Friend not to lose sight of some of the other big, exciting potential opportunities that are opening up—for example, floating offshore wind power in the Celtic sea? Will he meet me, and other colleagues with an interest in the Celtic sea, to discuss what further steps he and his Department can take to further those projects?

[Mr Rees-Mogg]

I should be absolutely delighted to meet my right hon. Friend to discuss that. It is something that the Government are looking at. We are very enthusiastic about examining all possible sources, and I think that floating offshore wind is potentially a very good one. We want to establish whether we can expedite offshore wind projects so that they happen faster and we have supplies coming in. We need to be considering—and we are considering and discussing with other countries—how we can expedite carbon capture and storage and move towards hydrogen. The long-term issues are ones that we are focusing on and dealing with, but we have many years of needing gas, which is why I welcome my right hon. Friend’s support for this announcement.

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

It is this Government who have made onshore wind less economical, it is this Government who have made solar power and panels less economical, it is this Government who blocked wave and tidal power in the Swansea bay, and it is this Government who have failed to invest; and now they are trying to cover it up with a fracking giveaway for which there will never be any local consent. Will the Secretary of State—and he has been asked this numerous times—confirm that people in local areas will have a say through a local referendum, and that the result will be binding?

[Mr Rees-Mogg]

This Government have only been in office for about a fortnight. I know that they have been busy and have not quite managed to do everything that the hon. Gentleman suggests. As regards local consent, I refer him to the answer that I gave some moments ago.

[Mark Fletcher (Bolsover) (Con)]

I have listened carefully to the Secretary of State, and I have to say that the local consent plans do not seem to wash. It seems to come back to communities’ being bought off rather than having a vote. Can the Secretary of State confirm once and for all that residents across Bolsover who are concerned about fracking will be given a vote to object to these schemes locally?

[Mr Rees-Mogg]

I think I have made it very clear that the companies will have a deep responsibility to develop packages that make the extraction of shale gas attractive to local communities. It is very important for them to succeed in that.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

The people of Ellesmere Port have already signalled their opposition to fracking. A planning application was submitted a number of years ago, the local authority rejected it, there was an appeal, many residents gave evidence against the application and after three years it was finally decided that it would not be accepted. Chester zoo, a big employer in my constituency, said today that it was opposed to fracking, and many of my constituents are repeating their objections. There is no local consent in Ellesmere Port and Neston, so will the Secretary of State send the fracking companies the message that there is no point in their coming to ask, because they will not get our agreement?

[Mr Rees-Mogg]

Ask, and it shall be given; seek, and ye shall find. It is absolutely important that we try to get local consent, and that will require the drilling companies to be innovative in the packages that they come up with. We should not be ashamed of paying people who are going to be the ones who do not get the immediate benefit of the gas but have the disruption: that is a perfectly logical thing to do.

[Jason McCartney (Colne Valley) (Con)]

May I ask once again how the Secretary of State will measure local consent, because I have absolutely no confidence in Labour-run Kirklees listening to local wishes? It does not even distribute the section 106 payments from planning applications to local communities fairly. How would we ensure that those impacted by any fracking wells get any benefit?

[Mr Rees-Mogg]

My hon. Friend hits the nail on the head. It is fundamentally important that the cash benefits go not to some faceless bureaucracy but to the individuals affected. In the United States, that has made the extraction of shale gas enormously popular, because people quite like improving their standard of living, and I think that the same is true in this country.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

Will the Secretary of State explain exactly how the UK Government deciding to get rid of the fracking ban aligns with their COP26 commitments?

[Mr Rees-Mogg]

Using our domestic resources, as my hon. Friend the Member for South Thanet (Craig Mackinlay) mentioned earlier, reduces our carbon emissions —it is really straightforward.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

Fracking is an outdated, dangerous and expensive way to produce energy, and it will not provide the clean, secure energy that our country needs. In my constituency, an exploratory fracking site at Barton Moss needed a police operation, which cost Greater Manchester police £1.7 million in 2014 and involved 150 police officers across five months. Fracking did not have community support, and Greater Manchester police had to pay the heavy price of policing the demonstrations against it. Why are the Government forcing it back on the community in my constituency?

[Mr Rees-Mogg]

There is a war in Ukraine. We need security of supply.

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

I wonder if the Secretary of State could advise the House: what discussions will take place between his Department and the Scotland Office on enabling fracking in Scotland?

[Mr Rees-Mogg]

I regularly have conversations with the Secretary of State for Scotland.

[Barry Gardiner (Brent North) (Lab)]

This cannot be justified on environmental or economic grounds. The investment allowance will give gas producers 91p in every pound invested in new frack pads. Warwick Business School calculates that fracking could produce 330 billion cubic metres at a maximum—about 100 billion therms. At today’s spot price, from about 20 minutes ago, that would be £289 billion. Given that the taxpayers are covering nine tenths of the investment, why should they not get nine tenths of the profit?

[Mr Rees-Mogg]

The hon. Gentleman is making the argument for fracking. If there is that amount that we can get out, we should get it out as quickly as possible, and then we should ensure that it is distributed properly so that the people who are affected benefit, so that the companies that have invested benefit, and, yes, so that the taxpayer benefits. The oil and gas we get out of the North sea has been an enormous benefit to the taxpayer and has helped us have energy security. It is a beneficial thing to do. As regards the economics, it is straightforward: private companies will not invest if it is not a good deal. That is the basis of economics, and it is the right basis of economics.

[Simon Lightwood (Wakefield) (Lab/Co-op)]

I do not know about you, Mr Speaker, but I am sensing some tremors of dissent on the Conservative Benches. Fracking is expensive and dangerous, but it is also a disaster for our climate. Does the Secretary of State recognise that, if every country matched his plans to extract every ounce of gas, the planet would warm by 3°, spelling climate disaster? Does he not understand that this is a plan born of climate denial and economic illiteracy?

[Mr Rees-Mogg]

This is an alternative replacement source for gas that we are going to use anyway. It is not increasing our demand for gas, and the hon. Gentleman misses the ABC of economics.

[Mick Whitley (Birkenhead) (Lab)]

Yesterday, the Business Secretary confirmed that his Department will review the level of seismic activity that is permitted to take place at new fracking installations. Meanwhile, the Government’s energy security strategy rules out lifting the draconian planning restrictions that were imposed on onshore wind by the Cameron Government. Onshore wind is one of the cheapest, most popular and fastest to roll out forms of energy production available. Meanwhile, fracking, as the Chancellor himself has said, is hugely costly, will do little to reduce domestic energy costs, and risks inflicting immense damage on local communities and our precious natural environment. Will the Secretary of State concede that the Government have got their priorities wrong?

[Mr Rees-Mogg]

The thing we are lacking at the moment, most acutely, is affordable gas. Gas is the fuel that provides electricity at the margins, so when the wind is not blowing and demand is high, it is gas that provides the marginal unit of electricity. Gas is therefore fundamentally important to our energy security.

[Wera Hobhouse (Bath) (LD)]

The present Chancellor said only a few months ago that “No amount of shale gas” extracted across rural England would lower energy prices, and indeed, that private companies would not sell their shale gas to UK customers at a cost lower than the market price. Ruining our countryside—in Sussex, East Surrey and around Bath—is not the answer. Why in his first week in office has the Secretary of the State ended the moratorium on fracking but not lifted the de facto moratorium on onshore wind?

[Mr Rees-Mogg]

We need to get as much energy as possible. Fracking does not ruin the countryside; fracking sites are actually surprisingly small for what they do. We have been expanding offshore wind dramatically—that has been a very big component—and we are continuing with increasing renewables, but we still need the base supply that can be brought on when there is a surge in demand, and that is dependent on gas.

[Matt Western (Warwick and Leamington) (Lab)]

The public will see this decision as a deceit. There is no economic price advantage to it, as we have heard, while it is damaging to the environment. The claim that the public will have some say in consenting to the proposals will ring hollow in my community, where the district council opposed a 5G mast and that was overridden. Why does the Secretary of State think that there is any advantage to this policy, when we cannot even put in onshore wind in Warwickshire? I believe it is the only county in this country where there is no onshore wind.

[Mr Rees-Mogg]

The answer is energy security and price.

[Karin Smyth (Bristol South) (Lab)]

The Secretary of State’s constituency of North East Somerset borders mine; it would be helpful if he could confirm that we are not expecting any fracking or seismic events in the local community. Small and medium-sized businesses in Bristol South were innovative in green and future energy, but they had the legs cut from under them in 2015 when his Government “cut the green crap”. What assurance can he give businesses in Bristol South on future energy development?

[Mr Rees-Mogg]

The subsidies that are paid, when they are paid, have to be reasonable and proportionate and we are finding that, with some of the old contracts that we have based on the gas price for renewable energy, it has led to very high prices. North East Somerset was the site of the old Somerset coalfields, which were a very successful part of the economy historically. I think everyone in this country will have to do their bit to help with energy security.

[Valerie Vaz (Walsall South) (Lab)]

I wonder whether the Secretary of State would placate the luddites and publish the up-to-date evidence that enabled the Government to U-turn on both their manifesto commitment and the previous Prime Minister’s policy.

[Mr Rees-Mogg]

I believe that this decision is completely consistent with the manifesto commitment on the safety of shale gas. The reason it has come to the fore now is the very high price increase in gas and the issue of energy security caused by Putin’s invasion of Russia. That has fundamentally changed, and so on the balance of arguments and practicalities, with a safe and well-proven technology, it is right now to extract shale gas as far as we can do so.

[Dame Nia Griffith (Llanelli) (Lab)]

As the 2022 Government security strategy acknowledges, onshore wind is one of the cheapest and easiest renewables to bring on stream. That same strategy is wishy-washy and lacks any drive for fast-tracking new wind generation. Will the Secretary of State now recognise the urgency of the current situation, revise the strategy, give onshore wind in England the boost that it needs, to complement the investment in wind that Welsh Labour has continued to promote in Wales, and therefore reduce our reliance on electricity produced from gas, which is currently at some 47% of the total?

[Mr Rees-Mogg]

What we do with renewables is still going to leave us dependent, when the wind is not blowing and when there is a surge in demand, on gas. That is an important part of the strategy; we are building up our wind and nuclear supplies, and we have plans for more nuclear to come on, but for the transition we still need gas, which is what this announcement is about.

[Catherine West (Hornsey and Wood Green) (Lab)]

Is the truth not more fundamental: when a party stands on a manifesto promise, regardless of what it is, it should stick by that? Can the right hon. Gentleman rule out today any link between the proposal that has been announced and any donations made during the leadership election?

[Mr Rees-Mogg]

Balderdash.

[Sarah Owen (Luton North) (Lab)]

Fracking takes huge amounts of water. We have just seen record levels of drought across the entire country, with drier summers predicted for the future. In periods of drought, will Tory Ministers be prioritising precious water supplies to people in their homes or to big fracking companies?

[Mr Rees-Mogg]

The water for fracking is primarily recycled.

[Richard Burgon (Leeds East) (Lab)]

The Secretary of State talks about fracking being in the national interest, but the truth is that fracking is in the corporate interest, which is why this Government are pursuing it. This is going to do nothing to lower people’s energy bills. Renewables are nine times cheaper than gas. At the time when we should be moving away from and ending our reliance on gas, is this push not really about serving the interests of those energy giants, many of which have close links to his party? Is it not about time the Government acted in the interests of the people in Yorkshire and across this country?

[Mr Rees-Mogg]

What is the hon. Gentleman going to say to his constituents when there is no gas going into their boilers to heat their hot water and their homes? This ridiculous hostility to gas as a transition fuel is absurd.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

Onshore wind power was, in effect, stopped by the Secretary of State’s Government, yet it is proven in the UK, cheap and ready to go now, and it provides zero-carbon power—it does everything that fracking does not. So will the threshold for community support for fracking be as tough as that for onshore wind development, where one objector can stop it?

[Mr Rees-Mogg]

Regardless of the benefits of renewables, we still need gas, which is what today’s statement is about.

[Mr Clive Betts (Sheffield South East) (Lab)]

The Secretary of State has admitted the environmental impact of fracking—the drilling platforms, the wells and the lorry movements—which are significant and substantial. The planning system is best placed to deal with those, so in 2018 the Select Committee on Housing, Communities and Local Government produced our “Planning guidance on fracking” report. We concluded that fracking decisions were best made by elected local planning authorities. We do not know what the Government’s view is, as four years after that report we still have not had a response from Ministers to our recommendations. Will he assure us that by the end of October, when we come back, the Government will have responded, four years late, to that report?

[Mr Rees-Mogg]

The Lord President of the Council and Leader of the House is present, and I think that was very much a business question. I would say that I will make sure it is passed on to her, but I hope that she will feel that it has been passed on in any case.

[Peter Grant (Glenrothes) (SNP)]

I have been listening to Members on both sides of the House gradually teasing out what the Secretary of State really meant when he said that “compensation and consent” are

“two sides of the same coin.”

Why does he not just come clean and tell it as it is: the Government intend to change the payment of bribes for planning consent from a criminal offence to the official policy of His Majesty’s Government?

[Mr Rees-Mogg]

The hon. Gentleman is a wise and good man, but that point is completely fatuous. Paying people for inconvenience is a perfectly reasonable and commercial thing to do.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

The truth is that this will not provide any immediate relief for consumers. When in Wales we have taken measures to try to support our energy security, it was the UK Government who pulled the rug out from under tidal power and tidal lagoons, and who failed to make progress on Wylfa Newydd. Will the right hon. Gentleman be absolutely clear on this? The Welsh Government have issued a moratorium on fracking—this is very clear, with 1,900 submissions to consultation. Will he absolutely rule out attempting to undermine that position and that consent—that view from the Welsh Government?

[Mr Rees-Mogg]

As I have said before, there is no plan to change the devolved situation, and that is not a matter for my Department anyway, so I can give the hon. Gentleman that assurance. As regards tidal power, the costings simply were not economic, and that has been a problem with tidal proposals.

[Dame Diana Johnson (Kingston upon Hull North) (Lab)]

The Secretary of State has talked a lot about common sense and using our natural resources, so will he explain why the Government are not dropping the moratorium on onshore wind?

[Mr Rees-Mogg]

We have had an enormous amount of offshore wind come on, and it is a very important part of renewables. It has been a very effective way of getting very large quantities of power, and that has been the major concentration of Government policy in recent years.

[Jeff Smith (Manchester, Withington) (Lab)]

Who, specifically, will be responsible for measuring and determining local consent for fracking?

[Mr Rees-Mogg]

The matter will be dealt with in a governmental way, as is normally done when we seek to work out what the consents are. There are perfectly proper processes for establishing the views of local communities.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Fracking is the most unpopular and least effective way of producing energy, and it risks substantial geological impacts. Yet there is no evidence that it will reduce the price of gas, according to the Government’s own advisers. Onshore wind, solar and hydro, including pumped storage—new cutting-edge technologies—are all much cheaper, much safer and more popular. Why does the Secretary of State dislike these technologies so much, and whose interests are being furthered by fracking?

[Mr Rees-Mogg]

The hon. Gentleman is wrong to say that I dislike those technologies. I actually think that pumped hydro is a particularly interesting technology, because it can be used with wind power to act, effectively, as a battery. So there is support for these technologies. In this urgent question we are discussing shale gas, but that does not mean that my Department is not looking at all forms of energy. We need a wide range of supply, we need security of supply and we need supply that is cheap, or as cheap as we can get it.

[Matt Rodda (Reading East) (Lab)]

Residents across the south of England are deeply concerned about the risks of fracking and oil drilling. Why is the Secretary of State not listening to those concerns, or to the concerns of the Government’s former chief scientific adviser and the British Geological Survey?

[Mr Rees-Mogg]

Quite properly, the concerns of this House are being represented by Members of Parliament, so they are being listened to by His Majesty’s Government.

[Cat Smith (Lancaster and Fleetwood) (Lab)]

It appears that the only person who believes that fracking will lower our gas prices is the Secretary of State. That view is certainly not backed up by anyone in industry, and there is no question over the environmentally damaging nature of fracking. However, one thing that he is perhaps not aware of is the strength of opposition to fracking in communities such as mine in Lancashire, where sites at Preston New Road and Roseacre have seen huge police presences just to manage the protesting. There is no public support for fracking, so will he make it very clear whether my constituents will be given a decision on whether fracking happens in Lancashire?

[Mr Rees-Mogg]

A number of people have said that fracking is environmentally unfriendly, but it is more friendly than importing liquefied natural gas from abroad—it has a lower carbon footprint, and that is fundamentally important. I am well aware that there have been objections to fracking, but I would also note that there have been stories, widely reported, that some of the opposition to fracking has been funded by Mr Putin’s regime.

[Daisy Cooper (St Albans) (LD)]

Does the Secretary of State recognise that he has now put his Government in the absurd position of wanting to impose fracking on communities that do not want it, while not allowing onshore wind turbines in communities that do want them? Onshore wind turbines are cheap and quick to erect, and normally bring about cheaper energy bills for local communities. Will the Secretary of State finally—without reference to offshore wind and everything else he is doing—please answer the question directly: will he lift the ban on onshore wind?

[Mr Rees-Mogg]

Community consent is important, and the hon. Lady is right to point that out.

[Clive Efford (Eltham) (Lab)]

Only a few weeks ago, the Prime Minister quoted the Conservative manifesto when she said that she was going to reverse the rise in national insurance because the party had pledged not to increase it—apparently that was a solemn pledge. The manifesto also said that there would be no fracking where there was no local consent, but apparently that was not a pledge. Can the Secretary of State tell us whether local communities will be consulted before testing takes place, and who will pay the bribes? Will it be the taxpayer or, as he says, the market forces?

[Mr Rees-Mogg]

The socialists do not like people being paid for things. It seems perfectly reasonable to pay people and, if we inconvenience them, to compensate them, and that will be part of the overall package if shale gas can be extracted.

[Janet Daby (Lewisham East) (Lab)]

Are the Government aware that fracking not only breaks a promise made to the public in the Conservative party’s 2019 manifesto, but will not cut bills? It is a grossly unpopular method, and a method that will warm our planet. Indeed, it is wrapped up in climate denial.

[Mr Rees-Mogg]

It is actually none of those things.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I have been listening to the Secretary of State’s plea for good common sense. I have always believed that good public policy is made from good research and evidence of what works where. He has not said anything—nor has anyone on the Opposition Front Bench—about energy from waste. Energy from waste works successfully up and down our country—in Sheffield, Leeds, Southampton and London—and it not only produces good energy, but heats many, many homes in the community at low cost. When will the Government look at that and stop diverting attention to fracking?

[Mr Rees-Mogg]

I am genuinely grateful to the hon. Gentleman for his important point. We do actually export waste, I think, to Denmark for the Danes to turn it into energy. It seems to me that it might be better to do it domestically. He has made a very helpful suggestion. I have already talked about it in the fortnight that I have been in office. If he wants to make further representations to me on it, I would be very open to hearing them.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

Can the Secretary of State reassure me and my constituents in North Ayrshire and Arran that the pernicious and insidious United Kingdom Internal Market Act 2020, or any other sinister mechanism, will not under any circumstances be used to impose fracking in Scotland, against the expressed wishes of the people of Scotland and Scotland’s democratically elected Government?

[Mr Rees-Mogg]

The United Kingdom Internal Market Act is like the Koh-i-Noor diamond; it is one of the jewels of our constitutional settlement.

[Margaret Greenwood (Wirral West) (Lab)]

My constituents will be extremely alarmed to hear the Minister’s remarks about the exploitation of dangerous fossil fuels. They have made it abundantly clear to me that they care about the environment, they care about the next generation, and they take climate change seriously, so I ask him, on behalf of my constituents: will he think again and ban fracking?

[Mr Rees-Mogg]

The hon. Lady refers to dangerous fossil fuels that people depend on for heating their water and their homes every day, that businesses depend on for being in business, and that people put in their cars to get around the countryside. We need to ensure that we have a sensible transition. Gas is fundamental to that. Simply wishing the world to be a different world will not be a successful policy.

[Rachael Maskell (York Central) (Lab/Co-op)]

Yorkshire is currently under a hosepipe ban because we simply do not have the infrastructure in place to provide resilience in our water supply. At the same time, when fracking uses an exhaustive amount of water, this proposal does not make sense. Will the Secretary of State publish an impact assessment on our water infrastructure to ensure that there is resilience in the system before he even considers fracking?

[Mr Rees-Mogg]

The hon. Lady raises a fair point. It does depend on the water company. In my area, Wessex Water has done a phenomenal job of ensuring that it did not need hosepipe bans, or even get close to hosepipe bans, because it runs its system effectively. She is right to call on the water companies to run their systems effectively, because it is hard to believe that the United Kingdom is actually short of water.

[Andrew Gwynne (Denton and Reddish) (Lab)]

The Secretary of State is well aware of the strength of feeling against fracking in those communities that are likely to have the applications made by the companies. He is also aware of how the planning system works. He talks about having the common consent of the community. If the local authority listens to the community and refuses planning permission, the fracking companies have the option to appeal to the Planning Inspectorate. It is not within the remit of the planning inspectors to consider common consent as a material planning consideration. Will he change the planning rules to ensure that that is not the case?

[Mr Rees-Mogg]

The hon. Gentleman will know that decisions on planning, when reviewed by the Planning Inspectorate, are made by a Secretary of State acting in a quasi-judicial capacity.

[David Linden (Glasgow East) (SNP)]

If the Prime Minister believes that fracking is safe and should go ahead with the permission of local residents, may I ask by which date we can expect to see fracking take place in the sprawling country retreat of Chequers?

[Mr Rees-Mogg]

I am not sure that, geologically speaking, Chequers is a suitable place for shale gas. The question from the hon. Member for Bristol South (Karin Smyth) was more apposite, because it may be more likely in my part of the world than in that of my right hon. Friend the Prime Minister.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

A few minutes ago, the Secretary of State mentioned hydrogen, which of course is the perfect answer, because when we burn it we get water. It is totally green and totally clean. There are well-developed plans for the production and storage of hydrogen based on the Cromarty Firth. May I cordially invite either the Secretary of State or one of his ministerial team to come north to my constituency to see what we are going to do?

[Mr Rees-Mogg]

I could not agree more with the hon. Gentleman. I think hydrogen is ultimately the silver bullet. We create it from renewable sources, because we have the wind power when people are not drawing on the electricity system; we use it as an effective battery and it can then, with some adjustments, be piped through to people’s houses to heat them during the winter. There are real opportunities with hydrogen—[Interruption.] We get some heckling from those on the socialist Front Bench, but I point out that everyone accepts that gas is a transition fuel. To get to where the hon. Gentleman wisely wishes us to go, we need more natural gas as the transition fuel, but he is right. I do not know that I can promise a visit in the short term, but in principle I would love to come, and my Ministers are like greyhounds in the slips waiting to get up to his constituency.

[Patrick Grady (Glasgow North) (Ind)]

People in Glasgow North do not want to see fracking anywhere on these islands, so ending what was in effect a UK-wide moratorium on fracking does not exactly speak to strengthening the Union. My constituents would like to know whether the Business Secretary actually believes that we face an anthropogenic climate emergency and, if so, how on earth a rush to fracking-sourced fossil fuels helps to meet the climate and emission reduction targets we have committed to.

[Mr Rees-Mogg]

As my hon. Friend the Member for South Thanet (Craig Mackinlay) pointed out, using our own resources emits less carbon than importing gas. Therefore, if the hon. Gentleman actually believes what he has just said, he should be supporting this policy.

[Jim Shannon (Strangford) (DUP)]

This shale gas extraction question has shone a spotlight on the energy crisis and the war that Putin is carrying out against Ukraine. Others have referred to this, but for those who live close by, whose houses will be devalued and whose lifestyle will be impacted, the Secretary of State has referred to compensation but has not quantified it. Will the compensation be a one-off payment for the value of their house? Will it be no energy costs? Will it be no rates? What does he understand that compensation will be?

[Mr Rees-Mogg]

As always, the hon. Gentleman waits patiently to ask a fundamentally important question. I am very grateful to him for that and for his assiduous attendance in the House. How the compensation packages will be worked out will be really important in gaining communities’ consent. There will be different approaches that work in different areas and different settings, but obtaining the consent must be the right approach. The compensation packages are something that must be developed, and his views on how they could best be developed would be extremely welcome.

Energy Update

Jacob Rees-Mogg Excerpts

Thursday 22nd September 2022 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Mr Jacob Rees-Mogg)]

Following the Prime Minister’s announcement on 8 September, yesterday, the Government published further details of the support we are offering to people and businesses in the face of soaring energy prices. This package of unprecedented assistance for the whole UK provides the certainty families and business owners need to help them manage their energy bills.

Details of the energy price guarantee for domestic consumers and the energy bill relief scheme for business and non-domestic properties are available on gov.uk. The Chancellor of the Exchequer will set out more details of the costs of the Government’s support as part of his fiscal statement on 23 September.

We have designed the schemes to be simple for energy consumers. Families and eligible businesses do not have to take action or apply for support, energy suppliers will automatically apply the appropriate reduction via their energy bill. Households will receive an equivalent level of financial support wherever they are in the UK. The same is true for businesses across the UK too.

The energy price guarantee will ensure that a typical household in Great Britain pays an average £2,500 a year for their energy from 1 October 2022, for the next two years. Households in Northern Ireland will see equivalent benefits on the energy bills. On average usage, a household in Great Britain will save £1,000 a year. This is in addition to the already announced £400 energy bills support scheme for households across the UK. The most vulnerable UK households will also continue to receive £1,200 of support. For consumers in Great Britain who pay for their energy through a monthly, quarterly or other regular bill, the energy price guarantee will be applied when their bill is calculated. The guarantee limits the amount the bill payer can be charged per unit of gas or electricity, so the exact bill amount will continue to be influenced by how much energy is used.

The energy bill relief scheme will provide protections for all businesses, voluntary sector and public sector organisations in Great Britain which face excessively high energy bills over the winter period, whether they are on existing fixed price contracts agreed on or after 1 April 2022, signing new fixed price contracts, variable or deemed tariffs or flexible purchase contracts. To administer support, the Government have set a supported wholesale price—expected to be £211 per MWh for electricity and £75 per MWh for gas, less than half the wholesale prices anticipated this winter—which is a discounted price per unit of gas and electricity. Suppliers will pass the reduction in the wholesale price through to their customers.

The energy bill relief scheme will run initially for six months covering energy use from 1 October 2022 until 31 March 2023. There will be a review of the operation of the scheme, to be published in three months’ time. This review will consider how best to offer further support to customers who are the most vulnerable to energy price increases. These are likely to be those who are least able to adjust, for example by reducing energy usage or increasing energy efficiency.

A similar scheme will be established in Northern Ireland, providing a comparable level of support. We intend to provide more information on the comparable support for non-domestic customers in Northern Ireland by the end of September.

The scheme for domestic consumers will be different, because of the different way the electricity and gas market operates in Northern Ireland. But it will provide households with an equivalent level of support as for those in Great Britain. Households do not need to take any action to receive this support, although it may take a little longer than for Great Britain for relief to take effect. However, the savings will be applied to energy used from October onwards so that households get the same overall benefit as those in Great Britain. The energy price guarantee limits the amount you can be charged per unit of gas or electricity, so households’ exact bill will continue to be influenced by how much energy is used.

Households in Northern Ireland will also receive the £400 discount on their bills through the Northern Ireland energy bills support scheme, which will offer the same level of support as for households in Great Britain. We aim to provide this £400 discount for Northern Ireland as soon as possible.

A comparable scheme to the energy bill relief scheme will be in place for businesses and other non-domestic customers in Northern Ireland. This will follow a similar structure to the GB scheme. We intend to provide more information on the comparable support for non-domestic customers in Northern Ireland by the end of September.

As the Prime Minister said on 8 September, the Government are bringing forward emergency legislation to underpin the delivery of our support package. We will introduce a Bill immediately after parliamentary recess. It will include measures for the GB energy price guarantee for domestic consumers and the energy bill relief scheme for businesses and non-domestic properties so all of GB receives equivalent support; and enable the delivery of comparable schemes in Northern Ireland. It will provide powers to enable low carbon generators to move on to fixed prices to end the situation where electricity prices are set by the marginal price of gas, ensuring consumers pay a fair price for their energy.

Contingent liabilities

I have laid before Parliament a departmental minute describing contingent liabilities arising from the energy price guarantee. It is normal practice when a Government Department proposes to undertake a contingent liability of £300,000 and above, for which there is no specific statutory authority, for the Department concerned to present Parliament with a minute giving particulars of the liability created and explaining the circumstances.

I regret that because of the urgency of establishing this scheme before 1 October, I have not been able to follow the usual timelines for issuing notice at least 14 parliamentary sitting days before the liability begins to be incurred.

The Treasury has approved the scheme in principle. I will continue to update Parliament on this scheme.

New oil and gas licensing

We are scaling up renewables, nuclear, and lower carbon energy sources, to boost Britain’s energy security in the long term, and reduce our exposure to high fossil fuel prices set by global markets outside our control. While we do this, there will continue to be ongoing demand for oil and gas over the coming years during this transition, with oil and gas needed to maintain the security of the UK’s energy supply. Making the most of our own domestic resources under the North sea will make us less dependent on foreign imports.

In the light of Putin’s illegal invasion of Ukraine and weaponisation of energy, strengthening our energy security is an absolute priority, and—as the Prime Minister said—we are going to ensure the UK is a net energy exporter by 2040. To get there we will need to explore all avenues available to us through solar, wind, oil and gas production, so it’s right that we’ve lifted the pause to realise any potential sources of domestic gas.

In 2021, it was decided that a climate compatibility checkpoint should be put in place, so that compatibility with the UK’s climate objectives is assessed as part of the decision on whether or not to endorse continued oil and gas licensing rounds.

In December 2021, a consultation on the design of this checkpoint was launched, running until the end of February 2022. A large number of detailed and thoughtful responses were received. The HM Government response, which is being published today, engages with many of the arguments put forward, and sets out the Government position on these. HM Government has also designed a checkpoint which takes the responses to the consultation into account; a document setting out this design and the tests to be included in the checkpoint is also being published today.

Having reviewed the results of these tests in the context of a 33rd licensing round, it has been decided that a 33rd licensing round is compatible with the UK’s climate objectives.

The Government understand that the North Sea Transition Authority will shortly be launching a new licensing round for oil and gas exploration. This round could result in the award of more than 100 licences to developers, strengthening the UK’s vital offshore oil and gas sector, putting more UK gas on the grid for longer, and bolstering the future energy security of the UK.

Shale gas extraction

The current pause (moratorium) on shale gas extraction was put in place on the basis that HM Government would only support shale gas exploration if it could be done in a safe and sustainable way, and that it would be led by the science on whether this was possible. The stated policy aim was to minimise disturbance to those living and working nearby, and to prevent the risk of damage.

Much has changed, however, since 2019.

In April this year, HM Government commissioned the British Geological Survey to advise on the latest scientific evidence around shale gas extraction, to assess progress in the scientific understanding which underpins Government policy, and to allow Ministers to consider next steps. Having considered their advice carefully, HM Government are publishing this report today.

The report makes clear that forecasting the occurrence of felt seismic events remains a scientific challenge for the geoscience community. It also makes clear that to improve our understanding we need more exploratory sites to gather the necessary data.

Geomechanical modelling has been an important tool in the United States for this purpose, but requires accurate mapping of sub-surface faults, for which more data is required in the UK. There have only been three test wells which have been explored for shale gas in the UK to date.

On the wider geopolitical stage, Putin’s invasion of Ukraine and the resulting restrictions on gas supply to Europe have impacted on global energy prices and the energy security of our neighbours and allies. This emphasises the need for “home grown” sources of energy to reduce our reliance on imports.

The Government remain committed to net zero by 2050, but we have to get there, and to get there we are going to need oil and gas. And domestic sources of gas clearly have a lower climate impact than shipping liquified natural gas by tankers halfway across the world.

Under these circumstances, HM Government consider it appropriate to pursue all means for increasing UK gas production, including shale gas extraction. The Government are therefore lifting the pause on shale gas extraction and will consider future applications for hydraulic fracturing consent with the domestic and global need for gas, and local support for developments, in mind.

While HM Government will always try to limit disturbance to those living and working near to sites, tolerating a higher degree of risk and disturbance appears to us to be in the national interest given the circumstances described above. With this in mind, it is important that the policy relating to shale gas extraction reflects this. HM Government will be reviewing this aspect of shale gas policy as part of a wider reflection on how to better support the industry throughout the whole life cycle of the investment, from initial exploration to large-scale production and I will provide an update on this in due course.

We will look to the North Sea Transition Authority and other licensing authorities to be proactive in extending existing consents and permissions where practicable, to support the development of energy resources in the national interest.

It is clear that we need more exploratory sites in order to gather better data and improve the evidence base and we are aware that some developers are keen to assist with this process. We look forward to seeing these proposals in detail.

Offshore energy strategic environmental assessment

HM Government have completed an offshore energy strategic environmental assessment (OESEA) of a draft plan/programme to enable further offshore licensing/leasing for offshore marine renewables, including wind, wave and tidal energy, oil and gas, gas storage including carbon dioxide storage, and offshore production and transport of hydrogen.

The renewable energy elements of the draft plan/programme cover the relevant parts of the UK exclusive economic zone and the territorial waters of England and Wales; for hydrocarbon gas storage it applies to UK waters, territorial sea and the relevant parts of the UK exclusive economic zone, and for carbon dioxide storage it applies to UK waters, the UK exclusive economic zone and relevant territorial sea, excluding the territorial sea in Scotland; for hydrocarbon exploration and production it applies to the UK territorial sea and the UK continental shelf; and for offshore production and transport of hydrogen it applies to UK waters.

A public consultation on the OESEA4 environmental report was undertaken between 17 March 2022 and 27 May 2022. All comments received on the draft plan/ programme and the environmental report have been considered by HM Government and a HM Government response for OESEA4 has been prepared and will be placed on the gov.uk website. This summarises stakeholder comments and HM Government’s clarifications and responses to them. The environmental report and the comments received have informed the HM Government’s decision on whether to proceed with the draft plan/programme.

HM Government have decided to adopt the draft plan/programme, with the area offered restricted spatially through the exclusion of certain areas together with a number of mitigation measures to prevent, reduce and offset significant adverse impacts on the environment and other users of the sea. On the basis of the evidence set out in the environmental report, which discussed the alternatives to the chosen approach, and the comments received during consultation, HM Government conclude that there are no overriding environmental considerations that would prevent the achievement of our draft plan/programme of offshore marine renewables leasing wind, wave and tidal technologies, offshore oil and gas licensing, offshore gas storage and carbon dioxide storage leasing/licensing, and offshore production and transport of hydrogen, provided appropriate mitigation measures are implemented along with future research. In all cases, the relevant competent authority should undertake any appropriate assessments prior to awarding licences or leases, where screening in accordance with the relevant conservation of habitats regulations shows this to be necessary.

The plan/programme based on OESEA4 will have a lifespan of approximately four years. HM Government, therefore, commit to refreshing the OESEA in two to three years’ time to account for the higher ambitions relating to offshore wind and hydrogen in the BESS that are expected to be delivered in the period 2026-2030 and any additional changes to the energy policy context, technology, and understanding of the environmental baseline and effects assessment. The associated documents have been placed in the Libraries of both Houses.

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Retained EU Law

Jacob Rees-Mogg Excerpts

Thursday 22nd September 2022 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Mr Jacob Rees-Mogg)]

On 31 January, to mark the two-year anniversary of the UK’s departure from the European Union, the Government set out their plans to bring forward the Retained EU Law (Revocation and Reform) Bill.

Retained EU law is a category of domestic law created at the end of the transition period. It consists of EU-derived legislation that was preserved in our domestic legal framework by the European Union (Withdrawal) Act 2018 to ensure continuity as we left the EU.

However, retained EU law was never intended to sit on the statute book indefinitely. The time is now right to bring the special status of retained EU law in the UK statute book to an end on 31 December 2023, in order to fully realise the opportunities of Brexit and to support the unique culture of innovation in the UK.

To achieve this, the Bill I have introduced today includes the following provisions;

Sunsetting retained EU law

The Bill will sunset the majority of retained EU law so that it expires on 31 December 2023. All retained EU law contained in domestic secondary legislation and retained direct EU legislation will expire on this date, unless otherwise preserved. Any retained EU law that remains in force after the sunset date will be assimilated in the domestic statute book, by the removal of the special EU law features previously attached to it. This means that the principle of the supremacy of EU law, general principles of EU law, and directly effective EU rights will also end on 31 December 2023. There will no longer be a place for EU law concepts in our statute book.

Before that date, Government Departments and the devolved Administrations will determine which retained EU law can be reformed to benefit the UK, which can expire, and which needs to be preserved and incorporated into domestic law in modified form. They will also decide if retained EU law needs to be codified as it is preserved, in order to preserve specific policy effects which are beneficial to keep.

The Bill includes an extension mechanism for the sunset of specified pieces of retained EU law until 2026. Should it be required, this will allow Departments additional time where necessary to implement more complex reforms to specific pieces of retained EU law, including any necessary legislation.

Ending of supremacy of retained EU law in UK law by 2023

Currently, retained direct EU legislation still takes priority over domestic UK legislation passed prior to the end of the transition period when they are incompatible. This is not in keeping with our status as an independent, sovereign trading nation, and the Government’s 2019 commitment to remove this.

Therefore, the Bill will reverse this order of priority, to reinstate domestic law as the highest form of law on the UK statute book. Where it is necessary to preserve the current hierarchy between domestic and EU legislation in specific circumstances, the Bill provides a power to amend the new order of priority to retain specific legislative effects.

Assimilated law

Following the removal of the special features of EU law from retained EU law on 31 December 2023, any retained EU law that is preserved will become “assimilated law” to reflect that EU interpretive features no longer apply to it.

Facilitating departures from retained EU case law

To ensure that EU law concepts do not become “baked in” through over-cautious court judgments, the Bill will also provide domestic courts with greater discretion to depart from the body of retained case law. It will also provide new court procedures for UK and devolved law officers to refer or intervene in cases involving retained EU case law.

Modification of retained EU legislation

To correct an anomaly created by European Union Withdrawal Act which gave some retained direct EU legislation legislative parity with Acts of Parliament for some purposes, despite it not having been properly scrutinised, the Bill will downgrade the status of retained direct EU law for the purposes of amendment. The Bill will modify powers in other statutes, to facilitate their use to amend retained direct EU law in the same way they can be used on domestic secondary legislation. This will enable the amendment of retained direct EU law, with the appropriate level of parliamentary scrutiny.

Powers relating to retained EU law

The Bill will also create powers to make secondary legislation so that retained EU law or assimilated law can be amended, repealed and replaced more easily. This Bill will allow Government via Parliament to clarify, consolidate and restate legislation to preserve its current effect. Using these powers, the Government via Parliament will ensure that only regulation that is fit for purpose, and suited for the UK will remain on the statute book.

Business impact target

Having left the EU, the UK has further opportunities to reform its regulatory regime. The UK Government published their consultation response to the “Reforming the Better Regulation Framework” and is in the process of implementing the wider reforms outlined.

As part of these reforms, the Bill repeals the business impact target, which is outdated and not fit for purpose. Any subsequent replacement of the business impact target, when combined with the other wider reforms, will ensure that the UK’s regulatory framework is fit for the UK economy, business and households, into the future.

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Energy Price Guarantee

Jacob Rees-Mogg Excerpts

Thursday 8th September 2022 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Mr Jacob Rees-Mogg)]

Her Majesty’s Government are acting to protect British households from the spiralling costs of energy. The energy price guarantee will give people certainty with their bills. The EPG will apply from 1 October and will discount the unit cost for gas and electricity use.

This guarantee, which includes the temporary suspension of green levies, means that from 1 October a typical household will pay no more than £2,500 per year for each of the next two years. This will save the typical household £1,000 a year. It comes in addition to the £400 energy bill support scheme.

The scheme will start on 1 October 2022, when Ofgem’s new price cap is due to come into effect. Cost projections for the delivery of the EPG are uncertain as they depend upon usage levels—which are highly dependent on weather patterns—and, for future three-month periods, the wholesale price of energy.

The new guarantee will apply to households in Great Britain, with the same level of support made available to households in Northern Ireland.

HM Government will also support all business, charities and public sector organisations with their energy costs this winter, offering an equivalent guarantee for six months.

The Chancellor of the Exchequer will set out the expected costs as part of the fiscal statement later this month.

[HCWS294]