UK-EU Common Understanding Negotiations

Lord Howell of Guildford Excerpts

Thursday 18th December 2025 Lords Chamber

[Lord Howell of Guildford (Con)]

My Lords, I will focus on the comments in the Statement on electricity co-operation trading with the European Union. Obviously, there are millions of families in this country who are wondering still how on earth to pay to keep their house warm and feed their children during the Christmas period, and indeed in any period. That is not as it should be. We should be much more concerned than we are about this totally unacceptable situation.

The Statement claims that the new co-operation plan that is being discussed will

“drive down energy costs and protect consumers”

and

“drive up investment in the North Sea and strengthen energy security”.

Can the Minister and her colleagues assure us that that really is going to happen, and that it will drive down the price from what it is now and not from the much higher price it is likely to be? This is a trick of statistics being used by the Government, which I do not like at all, and they should be much more straightforward. Is it going to make cheaper electricity for families and industry than we have now? I very much doubt it. Obviously, we want more investment in the North Sea. At the moment, we are paying the owners of wind farms literally billions of pounds not to produce electricity. The system is wrong and must be changed. I hope it will be, with the co-operation of the European market.

Those are the things on which we want some reassurance because, at present, they are not desirable. It is incredible that we are not producing competitively produced energy, in this country of all countries. We have the North Sea as a huge asset that we are not using properly—indeed, the Government are trying to slow it down. It is time we faced in another direction in this whole area, and I would like to hear more about it.

[Baroness Anderson of Stoke-on-Trent (Lab)]

Given that we have not touched on this point so far, it would be helpful to update your Lordships’ House. The UK and the European Commission have concluded exploratory talks on the UK’s participation in the EU’s internal electricity market. This closer co-operation will drive down energy costs and protect consumers against volatile fossil fuel markets. The UK and the EU will work at pace on these negotiations as we head into next year. While these are ongoing, we cannot comment on the specifics any further.

To reassure the noble Lord on how this is going to impact energy bills, joining the EU’s electricity trading platforms will lower bills by reducing trade friction. More efficient electricity trading allows us to make more efficient use of our shared infrastructure. This deal will also support investment in North Sea electricity infrastructure, allowing us to reduce exposure to volatile wholesale gas costs. This is one component of household bills among many others, but we genuinely believe it will have a direct impact. The noble Lord is right: there is nothing more important to communities, especially where I live, than the cost of living crisis, and we need to do everything we can to support families.