Energy Prices Bill

Jonathan Edwards Excerpts

Committee stage
Monday 17th October 2022 Commons Chamber

[The Minister for Climate (Graham Stuart)]

We are facing a global energy crisis, which has been exacerbated by Russia’s illegal invasion of Ukraine. This Bill puts support to help people, businesses, charities and the public sector across the UK with their energy bills on a secure legislative footing. It is a vital step in delivering the necessary package of assistance for the whole of the UK. We are putting the Bill through in an expedited way, and I thank His Majesty’s Opposition and other parties for their constructive engagement with us ahead of today. It is important that I put on record what the Bill will do, but I will seek to be brief because a number of Members are keen to speak to their amendments.

Clause1, together with clauses 2 to 8, provides for the establishment in legislation of the energy price guarantee schemes in Great Britain and Northern Ireland for electricity and gas. The EPG represents significant and bold action that will help to protect families from the spiralling cost of energy. This clause provides for the establishment of the EPG schemes and for them to be amended and revoked. For example, the schemes could be amended to change the eligible tariffs or the amount of financial support provided. The GB scheme has been operational from 1 October and delivered through contracts between the Secretary of State and energy suppliers. The Bill will put the scheme on a more secure statutory footing. The House will be aware that the Chancellor’s statement intends to refine the scheme after six months.

Clauses 9 to 12 will introduce a scheme that enables the Government to reduce the charges for electricity and gas supplied by licensed electricity suppliers to eligible non-domestic customers in Great Britain and Northern Ireland. This scheme represents significant and bold action to protect all eligible non-domestic customers, including businesses, charities and the public sector, such as hospitals and schools, from excessively high energy bills over the winter period. Without this intervention, the wider negative effects of this economic pressure would be severe and would materialise very quickly.

[Jonathan Edwards]

What advice would the Minister give to manufacturing companies in my constituency that have order books that extend past the six-month period, which the Bill supports, on pricing their products, given that they will have no idea what the cost of production will be following the increase in energy prices?

[Graham Stuart]

The hon. Gentleman’s question goes to the heart of the matter, which is that, if it were not for this intervention, those businesses would have been facing very high costs. We are committed to a review after three months, which will look at those who are least able to alter their energy use and come forward with proposals to help them in due course. That is why this is so important, but because of the costs and the impact, it needs to be time limited.

Clauses 13 to 15 will introduce powers for the Secretary of State to allow the Government to take steps, including the giving of financial assistance, to respond to the energy crisis, and to designate other bodies to take action in support of such steps. The power to give financial support is a time-limited power, at three years and six months. This is essential for the delivery of the various energy price support schemes and the administrative tying-up of them at the end part.

Clauses 16 to 18 allow the Government to break the link between high gas prices and cheap low-carbon electricity. These measures will allow the Government to take decisive action, through subsequent regulations, for a payment administrator to obtain excessive revenues from low-carbon electricity generators. This temporary measure will help more fairly to reflect the cheap costs of low-carbon generation. Clause 18, which extends the contracts for difference scheme to existing low-carbon electricity generators, will grant such generators longer-term revenue certainty.