Energy Costs in Wales

[Mr Clive Betts in the Chair]

I beg to move,

That this House has considered energy costs in Wales.

On our first day back in Parliament this term, this debate on energy costs in Wales is hugely timely. We are facing a national emergency. People are scared, cold, and paying the ultimate price for the energy crisis. I am therefore grateful that the Minister is in his place to listen to us discuss the very real issues that people are facing across the country, but it would be remiss of me to start without calling out the recent incompetent actions from the UK Government. In just a few short weeks, this Tory Government have plummeted millions of people into hardship and misery—the choice between heating and eating, going to bed cold and hungry or giving their child their last tin of food. The shockingly mishandled emergency Budget was inexcusable. It has seen the pound plummet, energy costs spiral, mortgages pulled, interest rates shoot up—and for what? Unfunded tax cuts for the richest 1% in society and bigger bankers’ bonuses.

I congratulate the hon. Lady on securing this important debate. In addition to that tirade of comments, will she recognise that the energy price guarantee is the most generous across all the major developed nations in Europe?

I thank the right hon. Member for his intervention, but providing that is the very least that could be done in the face of all this incompetence, quite frankly.

The result of this reckless decision will be felt by households across the country for years to come. It is always the most vulnerable who pay the highest price for the political choices made by this UK Government. In Wales, people are worried sick. Thankfully, our Welsh Labour Government have shielded so many from the very worst, but the crippling energy crisis is hard to undo when action from Westminster is worsening by the day. The human cost of such decisions cannot be overstated. At the launch of the Institute of Health Equity’s fuel poverty report last month, Professor Sinha said there is “no doubt” that children will die this winter. Damaged organs and respiratory illnesses are just some of the many long-term health impacts that people will face, and the trauma of going to bed cold and hungry will stay with someone for life.

I was speaking to the National Society for the Prevention of Cruelty to Children just this morning, and it told me how heartbreaking it is to receive calls through its helpline from children who really do not know what to do or how to help their parents, as they witness them struggle to make ends meet, often while living in cold, damp and mouldy conditions. I, too, receive heartbreaking calls from struggling parents just trying to do their best, and from distraught constituents torn between losing their home and losing their business. A pub in the heart of Cardiff North told me that it literally cannot afford to keep the lights on and is moving to using candlelight after receiving a £24,000 energy bill. My constituent Rebecca, a talented jeweller and silversmith, runs a small business on top of doing three other jobs. She faces a sixfold increase in her electricity bill. Her partner, Gareth, who contacted me worried sick, said, “What are we working for if not a better future?”

I am extremely grateful to the hon. Lady for securing the debate and for the very important points that she is making. It is right that we debate this issue. One of the big issues that we face is that the UK is not particularly self-sufficient when it comes to electricity generation; we are the second largest net importer of electricity in Europe. Meanwhile, Wales produces double the electricity that it consumes. We are a superpower, in European terms; no other country is close to the generation and consumption levels of Wales. The question that occurs to me is: how can we use that strength to safeguard our own people in Wales from the fuel poverty that they face?

The hon. Member makes exactly the right point. We want to hear from the Minister as to why that challenge is not being addressed. This week is also Hospice Care Week, and the families supported by Tŷ Hafan and Tŷ Gobaith—the two children’s hospices in Wales—really are the ones on the frontline in this energy crisis. Tŷ Hafan is facing a sixfold increase in energy costs at a time when it is also facing rising demand for its services. It could never have foreseen what was to come, and it is the families who rely on its support that suffer. The Welsh Government have provided support to the hospice with the funding uplift. However, the Chancellor is yet even to respond to its letter. The Business Secretary’s response was to assure hospices that they would be prioritised for additional support. Will the Minister confirm whether that is the case? The evidence clearly suggests the opposite.

Let me explain to the Minister the human cost of continued inaction. My constituent Emma has a son called Jack, who has cerebral palsy. Emma does not have the option of not using energy. She relies on it for Jack’s lifesaving equipment. Emma sadly lost her son Tom, Jack’s twin, to the deadly disease. It is families such as Emma’s who face nearly £600 more a month in bills. The support that Tŷ Hafan provides to families is invaluable. Will the Minister tell those families whether they will get an emergency assistance payment, and when that specialist support will be given to the hospices on which they so heavily rely?

The chairman of the Conservative party, the right hon. Member for Rossendale and Darwen (Jake Berry), said that people should just get better jobs. Emma is Jack’s full-time carer, living off just £850 a month in universal credit, topped up with a carer’s allowance. How would she manage? Will the Minister tell Emma whether the Government intend to uprate benefits in line with current inflation rates, so that she and her family can live and not just barely survive?

In an earlier comment, my hon. Friend mentioned prepayment meters. For those who use prepayment meters, £3.50 of every £10 that they top up goes on charges, and South Wales has one of highest rates in the UK. Does she agree that we really need to address that issue?

Absolutely. It is an area we need to focus on, and I hope the Minister will have an answer to that issue today.

The examples I have given show the real human cost of the energy crisis. I hope that this Conservative Government for once bear that in mind, instead of fighting one another like cats and dogs. The people paying the true cost of the energy crisis in Wales must not be forgotten or sidelined.

It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate the hon. Member for Cardiff North (Anna McMorrin) on securing this important debate. I look forward to the contributions of all Members, because this is a serious issue that needs addressing in a serious way. In the spirit in which I congratulated the hon. Lady on securing the debate, I am bit disappointed by the party political tone that it has taken. These are genuine, serious issues that need addressing. Constituents are looking to politicians to find the best response to a genuine energy supply crisis and its sources, which we will come to in a moment. I am disappointed that the debate has been so party political so far, but I will try to move it on in a way that might be helpful to constituents who listen.

I think the right hon. Gentleman failed to hear what I actually said. I was clarifying what the different Governments provide and setting out the human cost of what is happening because of the political choices made by the UK Government and this Prime Minister. I sincerely hope he can understand that.

I will respond to some of the points that have been made, but we need to recognise that the absolute cause of the challenge is the war in Ukraine and Putin’s aggression. Anyone who seeks to weaponise the increase in energy prices for political ends is undermining the war effort and Ukraine’s right to defend its nation. It is a serious issue, but that does not mean that we do not need to react.

The Government are reacting. We need to recognise some of the things they are doing and congratulate them, but there will be other areas where we want to press for further support. That is an intelligent way to pursue a debate, rather than saying that everything politicians in Cardiff Bay are doing is right and everything those in Whitehall are doing is wrong. That is simply not credible and it is not the case. I am disappointed that the war in Ukraine is being weaponised in this way.

Just weeks ago, we saw the explosions at Nord Stream 1 and Nord Stream 2, which were clearly attacks, although we have no certainty about the reasons for them or their source. They have had an impact on supplies across Europe, but thankfully supplies to the UK do not come from Nord Stream 1 and Nord Stream 2, and are therefore much more secure. I underline my interest as chairman of the all-party parliamentary group for energy security. It would be helpful for us all to recognise that energy is traded at a multi-national, if not a global, level. That is part of the complexity of the situation, rather than the simplicity that has been described.

Constituents want to know exactly what support they will get. Everyone will get a grant of £400 in addition to a council tax rebate of £150 for properties in bands A to D. There are also additional payments, including a cost of living payment of £650 for benefit claimants, a one-off payment of £300 for pensioners for heating, and a disability cost of living payment of £150. Those payments will alleviate the situation and make sure that some people are able to keep the fires burning. They may have formed the impression that they could end up in an extremely unfortunate situation, but they may well be able to avoid that, depending on their individual circumstances.

I am grateful that the right hon. Gentleman raised this point because I asked a written question on this issue and was referred to an answer to another Member. That answer was not particularly clear to me, so when my constituents ask me how they will receive the support I am unable to provide that answer. I am sure that, like me, the right hon. Gentleman would like the Minister to clarify that today.

I am grateful to the hon. Member for underlining that point. I recognise that it is a complex situation. There are so many facets, which is why, again, we need to have a reasonable debate to address these serious issues. Until now people in park homes will not have had much clarity from this debate, and I look to the Minister to provide it, but it is not a straightforward situation.

I seek greater clarity on the level of support and I press the Minister to look again at extending support for off-grid properties. Many residents in my constituency—I declare an interest as one of them—do not have the privileges or benefits of mains gas and therefore depend on either liquefied petroleum gas or oil. We need to recognise that there is a standard volatility in that marketplace, and off-grid properties may have benefited when oil prices were extremely low during the covid period, at less than $20 a barrel of oil—I ensured that I filled my tank up at that time—compared with the 85p, 86p or even 90p a litre that is available now. I was talking about $19 a barrel, but that was also 19p a litre at the time. It is now up to 90p per litre of oil, which people off-grid have to use, and LPG will have a similar volatility. I hope the Minister will give that greater consideration or at least provide some hope that there will be further support.

There is a final area of support to which I hope the Minister will be able to bring some clarity—not necessarily now, because it is quite a complex picture, but certainly by providing greater information or tables online. The Government website sets out examples of different sorts of businesses and how they will benefit, from the average corner shop or pub to larger organisations. It explains the types of approach and savings that they would make. I looked for specific examples of numbers to be provided according to the market rate. One grocery business in a rural area in my constituency was paying 21p per kWh; now, at the market rate, it is paying £1.26 per kWh. When a business seeks to negotiate through a broker for guarantees of the level of Government intervention and how much that will be, the broker makes the case—as do energy providers; I have spoken to some—that they do not know how much the Government discount is specifically until they accept the contract, as that is when they can confirm it. That does not seem to be the most reasonable position.

It is a pleasure to serve under your chairmanship this afternoon, Mr Betts. I am grateful for the opportunity to speak briefly today. I congratulate my near constituency neighbour, my hon. Friend the Member for Cardiff North (Anna McMorrin), on calling this important debate.

Although we have seen a new Prime Minister appointed in recent weeks, when it comes to this 12-year-old Tory Government it is the same old story. Like people throughout Wales and the United Kingdom, the people of Newport West are looking for proper action to support them as they face rising energy costs. There is nothing new about the Tory fantasy of trickle-down economics, and there is nothing new about a Tory who, when asked “Who pays?”, answers “You: the working people of Britain.”

In her first Prime Minister’s questions, the Prime Minister said she was against a windfall tax, as she did during her leadership campaign, during that wasteful summer of inward-looking Tory politics. My constituents want to know why the Prime Minister remains so committed to protecting the £170 billion of excess profits of the oil and gas giants—profits that they did not expect and that the companies have actually suggested should be used to mitigate the effects of this energy and cost of living crisis. Because of the Prime Minister’s decision, the people of Newport West and others throughout the country will now have to pay the bill for this Tory cost of living crisis.

It is worth remembering what the former Chancellor, Mr Osborne, said in 2008: that profligate borrowing could provoke a run on sterling, or require a rise in interest rates that would plunge Britain deeper into recession. I think some chickens are coming home to roost now.

I recently had a call from a constituent—a retired colliery worker—in Bassaleg. Like so many in Newport West, he has paid his taxes and never missed a bill. However, as we approach winter, the rising cost of energy is putting a serious strain on his finances. He told my team that it is simply not fair that ordinary people are being forced to foot the bill while the energy companies laugh all the way to the bank, saying:

Can I take the hon. Lady back to the windfall tax? I do not think a windfall tax would pay for all the energy schemes, but it would definitely make a significant contribution to the public intervention that will be required. The reality is that even the oil executives are mildly in favour of it: BP announced a few months ago that a windfall tax would not make any difference to its investment plans over the next 10, 15 and 20 years.