Energy

I inform the House that Mr Speaker has selected amendment (b), in the name of the Prime Minister. I call the shadow Secretary of State to move the motion.

I beg to move,

That this House calls on the Government to introduce a plan for cheap power by cutting public expenditure to remove the ‘Carbon Tax’ (UK Emissions Trading Scheme) from electricity generation and end Renewable Obligation subsidies; notes that the UK has the highest industrial electricity prices in the world and the second highest domestic electricity prices; further notes that high power costs are holding back economic growth and making households poorer; believes that cheap energy is essential to enable economic growth, the expansion of the artificial intelligence sector and the electrification of heating and transport; further calls on the Government to stop the Allocation Round 7 auction, which will lock consumers into high energy bills for decades; also notes that three quarters of the UK’s energy needs are met by oil and gas, and recognises the vital contribution of the North Sea industry to the nation’s energy security, to skilled employment, and to the public finances through billions of pounds generated in tax revenue; notes that shutting down domestic oil and gas production would increase reliance on foreign imports with higher carbon emissions; and also calls on the Government to end the ban on new oil and gas licences and to scrap the Energy Profits Levy in order to maximise investment in that sector.

Our cheap power plan would cut electricity bills for everyone by 20%, and under it, we take a common-sense approach to British energy security by backing the North sea. The plan recognises that the biggest problem the country faces is the cost of our electricity. It is a problem for living standards, for industry, for artificial intelligence and for electrification. The focus of any Government should be making electricity less expensive, not more expensive, as Labour’s plans will. They should be about making electricity cheap. Under our cheap power plan, we would axe the carbon tax—which has gone up by 70% this year under Labour, pushing up everybody’s energy bills—and scrap the renewable obligation subsidies, which result in some wind farms get three times the market price for electricity.

I would like to start by thanking the Liberal Democrats, who came out this morning as backing the second part of our plan. I would also like to thank Reform, which appears to have copy and pasted the plan wholesale, and the Tony Blair Institute, which just two weeks ago said that we need to ditch Labour’s disastrous clean power plan in favour of a cheap power plan that takes off carbon taxes. That sounds familiar.

Even before my right hon. Friend came into the Department and asked for a whole-system energy cost analysis when I was the Energy Minister, our strategic objective was to be among the countries with the cheapest electricity prices in Europe by the 2030s. Does she have any idea why the Labour party has now dropped that as a strategic objective?

I thank my right hon. Friend, who is so knowledgeable on matters to do with energy. He is right: the only people who have not got the message are Labour Members, who are on the wrong side of this debate. The Secretary of State promised to cut bills by £300, but bills have gone up by £200 since the general election. I warned Labour Members over and over again that this would happen, but they did not listen. Now, under their plans, energy bills will keep on rising. They might not want to hear that from me, but they should listen to the trade unions, or to energy bosses, who came to Parliament just a few weeks ago and, in a bombshell moment, said that even if gas prices went to zero, bills would still rise because of Labour’s plans. I would hazard a guess that their view is shared by the Prime Minister, given that he tried to sack the Secretary of State at the last reshuffle. What does the Prime Minister know that these guys don’t, I wonder?

Our electricity is already some of the cleanest in the world, but it is also the most expensive. If we want people to adopt electric cars or electric home heating, we need to make electricity cheap. If we want artificial intelligence or industry to succeed in this country, we need to make electricity cheap. If we want people to have a better standard of life, so that they can spend more money on their families than on their bills, we need to make electricity cheap. Our cheap power plan would cut electricity bills by 20%, and not just for a favoured few, whereas Labour is pushing up bills for 22 million families to give handouts to 6 million. Our plan would cut bills for everybody—households and businesses. It would mean £165 off the average family’s bill, but even more if they spend more—and we could do it now.

When the right hon. Lady speaks about “our country”, does she include Northern Ireland? Would her motion extend to Northern Ireland? Unfortunately, we are subject to EU regulations, which on 1 January will introduce the carbon border adjustment mechanism; so in addition to the iniquitous Irish sea border, there will be a carbon border. Her party brought that about. What does she intend to do about it in the future?

The hon. and learned Gentleman is right to raise the plight of Northern Ireland. As he knows, there is a single energy market on the island of Ireland, but we need to cut electricity costs for everybody, right across these isles.

The first part of our plan would be to axe the carbon tax. The carbon tax on electricity pushes up the price of gas, wind, solar and nuclear, and it has gone up by 70% this year, thanks to the Government’s policies. We asked Labour Ministers about this, and they pretended not to know anything. We warned them not to put the tax up, and they said it was a Conservative scare story, but here we are. The Secretary of State blames gas for high bills, and I am sure the Minister will do the same in his speech, but a third of what we pay for gas is a carbon tax that the Government choose to impose. If the Secretary of State thinks that the price of gas is too high, he could take off the carbon tax and cut the price of gas by a third tomorrow. Guess what? That would make wind, solar and nuclear cheaper, too. Every time someone blames gas, it is like them complaining that their bath is overrunning when they will not turn off the taps. It is in the Government’s gift to axe the carbon tax. It has gone up because of them, so what are they waiting for?

Secondly, when the wind blows, there are wind farms in this country getting three times the market price for electricity, thanks to renewables obligation subsidies. That is clearly mad. The Secretary of State doubled those subsidies when he had his last chance to ruin the energy system. We closed the scheme in office, but it is time to scrap it.

Those two policies would cut people’s electricity bills by 20% now, in time for winter—and in time for us to be a world leader in AI, and to stop the crippling redundancies in the industry that are coming down the track. Instead of taking up those policies, the Labour party is doing something very different: it is intent on locking us into higher prices for longer.

We saw this in the health service, with the private finance initiative; £13 billion of investment became £80 billion of public debt to pay back. Does my right hon. Friend worry that Labour seems to be following exactly the same principle by locking in these high future costs for our children and for the country?

That is exactly right, and I will come on to that point in a moment. Everyone remembers those contracts. My hon. Friend is absolutely correct; the Secretary of State is signing us up to this century’s PFI, but this time, the cost goes straight to our energy bills.

Would my right hon. Friend agree that the Government could at least be consistent in their management of contracts for difference and auctions? Does she share my bemusement at the fact that they have dismissed one way of providing about 7% of our grid requirements in fairly short order, which is accepting the interconnector between Morocco and the UK? That would bring reliable solar and wind-powered energy to the UK.

My right hon. Friend makes an excellent point about the reliability of electricity, which is what we need. We need electricity that will work in the winter when the sun is not shining, or when the wind is not blowing.

The question I would ask is this: why is the Labour party signing up to those high prices and locking all our constituents in for 20 years? It is because the Secretary of State is in the pocket of the wind developers. These are the highest prices for wind power that we have seen in a decade. [Interruption.] Ministers might shake their heads, but that is just a fact. It is much higher than the price of electricity right now, so why would they be buying more than ever before at the highest prices in a generation and fixing those prices for 20 years? I say this to Labour Members: if their constituents are saying to them—which I am sure they are—that their bills are too high now, what will they say to them in January, when it will be the Labour party that locks them all into even higher prices for longer?

Can the right hon. Member remind the House which party was in power when we reached cripplingly high energy prices that led to the cost of living crisis that we have today?

I remind the hon. Gentleman that when I was Energy Secretary, bills came down by £500. Under this Secretary of State, they have gone up by £200. What he needs to explain to his constituents is why signing up to higher prices on inflation-linked contracts for 20 years will fulfil the promise he made to those constituents to cut their bills by £300. I wish he could explain that.

It is worth Labour Members listening to this. From the Tony Blair Institute to the most respected energy economist, Sir Dieter Helm, everybody has pointed out this risk to them. It has not come to them without warning, the fact that they are signing up to prices much more expensive than gas for decades. They are on the wrong side of this debate and they are on the wrong side of consumers. Come January, when the results are published, everybody will be able to see that. And they will ask them: were you warned? Did you do your job in Parliament and speak up for me and my bills? Here is the problem. Their whole position is not driven by what is best for consumers; it is driven by ideology. Nowhere is that clearer than in their war on the North sea. When Scottish Renewables says that Labour’s policy on oil and gas is damaging the transition, surely even Labour Members must realise that they are on the wrong path.

My right hon. Friend is making a very able speech explaining why the clean power 2030 action plan is so ruinous for consumers. What she has not mentioned is that trying to connect up this very dispersed array of wind farms across the North sea requires an enormous amount of new infrastructure. We now know that the load factors are being reduced, so we will require 30% more wind turbines to create the same net zero effect. The wind farm investors themselves do not have to pay the full infrastructure costs for connecting all that up; it is the consumers who pick up the bill. So, there is another hidden subsidy for wind power that is not reflected in the guaranteed prices that are already being paid.

My hon. Friend is, as ever, an expert on this issue. If we look at the price cap and why it went up recently, it is those hidden costs. It was the balancing costs, paying wind farms to turn off when it is too windy. Next year, the network costs are about £100 per family. He is absolutely right that we have to look at all the extra costs that are coming down the track.

My right hon. Friend is making an excellent speech. I am really worried about my constituents who will face higher bills going into winter and beyond. The message is clear, is it not? This Labour Government have the power to get bills down, but they are making a choice not to do so.

My hon. Friend is exactly right. These are political choices and the Government should reflect on them.

When it comes to the North sea, we know that we will need oil and gas for decades to come—even the Climate Change Committee acknowledges that—yet thanks to the Government’s policies, we are paying Norway billions of pounds for gas from the exact same fields they are banning the British industry from drilling.

The right hon. Lady was kind enough to go through her plan with me. I will be honest: I think there is merit in discussing some of the proposals—[Interruption.] No, it is not what Opposition Members think. There is merit in discussing some of the proposals on a cross-party basis, and I am sure the Government will do that. The motion talks about the highest industrial energy prices in the world and the second-highest domestic energy prices, but that was true throughout the Conservatives’ time in office. They grew and became a massive problem. It is something I came across in this place in my time here. What is it about the situation that she found when she was Secretary of State, and her predecessors found, that made it so difficult to address those very high energy costs?