Fossil Fuels and Cost of Living Increases

I beg to move,

That this House has considered fossil fuels and increases in the cost of living.

It is a pleasure to serve under your chairship, Sir Robert, and to open this important debate on fossil fuels and increases in the cost of living. As we start 2023, households up and down the country are facing extraordinarily difficult circumstances, as we all know from our constituency mailbags, thanks to the cost of living scandal that Government policy has too often exacerbated rather than alleviated. Hikes in energy bills mean that over 9 million people—18% of the population—spent Christmas in the cold and damp, unable to heat their homes, and facing a new year with little respite, with experts warning that high gas prices are here to stay.

At the same time, the climate emergency is deepening and accelerating. Last year marked a year of extremes. It was the UK’s hottest on record, with the average temperature topping 10°C for the first time and the summer’s scorching heat made 160 times more likely by the climate crisis. It is clear that something is fundamentally wrong here, yet shockingly, I note that the climate and energy crises were entirely absent from the Prime Minister’s priorities that he outlined last week.

Fossil fuels are at the very heart of both the cost of living and the climate crises, choking our precious planet while subjecting families to sky-rocketing bills. Weaning ourselves off fossil fuels holds the key to not just ensuring a safer planet for future generations but creating warm and comfortable homes, bringing down bills and guaranteeing a supply of abundant green energy to deliver the transition to a zero-carbon economy. The bottom line is that, for a safe and prosperous future, we need to keep fossil fuels in the ground.

I want to look more deeply at the cost of living crisis that is facing so many of our constituents. As the Minister will know, households are already struggling to cope, with almost 60% of people saying that their financial situation has deteriorated over the past year. The Resolution Foundation has warned that 2023 will be “groundhog year”, with further cuts to living standards. Indeed, even with the support announced by the Government last year, a staggering 7 million households will still be in fuel poverty this winter, rising to 8.6 million from April, with the most vulnerable hardest hit.

It is profoundly shocking that one third of people with disabilities live in cold, damp homes and that a quarter of those with health conditions that are exacerbated by the cold cannot afford to heat their homes to a safe standard. This comes with serious health risks and puts further pressure on our severely under-resourced health service, which, as we all know, is already in serious crisis. In my Brighton, Pavilion constituency alone, there are several thousand people living with a cardiovascular or respiratory condition whose health is at risk if they cannot afford to put their heating on. It is genuinely astounding that the Government are planning on cutting the amount of support available to the most vulnerable households next year, just when bills are set to increase again, reducing support by 10% from £1,500 to £1,350. Will the Minister commit to addressing that gap? Will he seriously consider providing further support for those vulnerable households, given that bills are set to increase by 20% from April?

I thank the hon. Lady for giving way and congratulate her on securing the debate. I have heard many similar testimonies from constituents, particularly over the festive period, including from young people who wrote to me as part of the Warm This Winter and Parents for Future campaigns. I heard heartbreaking stories of children seeing their breath in the morning and not being able to recover from colds and coughs because they cannot keep their houses warm. I fully agree with the calls she makes. Those people also recognise in that correspondence the climate crisis and the need, for example, to not start new oil and gas exploration, which the Scottish Government have this morning announced a presumption against. We have to find alternative, cheaper, cleaner, greener ways of keeping warm.

I thank the hon. Gentleman for his intervention and join him in paying tribute to Warm This Winter, which has done fantastic work in gathering those case studies and presenting them to us. I congratulate the Scottish Government on their announcement this morning about a presumption against more fossil fuel exploration, because we know that getting more new fossil fuels out of the ground is driving both the climate crisis and—ironically, at a time when gas is nine times more expensive than renewables—the cost of living crisis.

The Government seem to have no money for working people, yet when it comes to fossil fuel companies they have been able to find—from somewhere—£13.6 billion since the Paris agreement. To give the Rosebank oilfield £500 million in taxpayers’ money is a disgrace when families face immense pressures. Does the hon. Lady agree that it is time for oil and gas subsidies to be phased out once and for all?

I thank the hon. Lady for her intervention, and she will not be surprised that I entirely agree that fossil fuel subsidies should go. Indeed, that has been said at several of the big climate global conferences—the conferences of the parties. There is supposed to be an agreement on getting rid of the subsidies, but we are certainly not leading by example, sadly.

I want to speak about prepayment meters, although I will come back to the subject of Rosebank. One of the ironies about Rosebank is that most of the oil extracted is for export in any case; we cannot even argue that it is doing anything to help us here at home. However, there is something serious going on with prepayment meters, and I am particularly alarmed by their forced installation. We have seen stories in the press, for example, of mothers returning home to find that meters have been installed while they were out. Locksmiths have come in and people have forced their way into homes to install prepayment meters. Not only that, but magistrates have been approving hundreds of warrants to install meters in just minutes—496 warrants in three minutes and 51 seconds, to be precise.

Prepayment meters should not be installed by warrant, and they certainly should not be approved en masse in such a manner, with no consideration of individual cases and individual vulnerabilities, but when I asked what assessment the Government had made of the impact on vulnerable people of the batch approval of warrants, I was shocked to receive an answer stating that

“the information which must be provided to the court is identical in each case”.

In other words, it makes no difference whether cases are considered individually or together, but that represents total disregard for individual people’s welfare and extraordinary complacency regarding the failings of the system. Surely the Minister sees that if magistrates are not provided with adequate information, they are unable to make informed decisions that take into account people’s vulnerability.

The hon. Lady is making an excellent speech, as she always does, and I could not agree more on the importance of energy efficiency. Does she also agree that those who are off grid and reliant on heating oil have the most to gain from piling into renewables and greater energy efficiency, because it would lower housing costs and increase climate efficiency?

I thank the hon. Member for his intervention and I entirely agree. I worry that people who are off grid in that way are essentially being hung out to dry. They are not being given the support they need, and they are some of the most vulnerable.

I am pleased that the Government have finally seen sense and committed to £6 billion of new funding from 2025 to 2028, but this is too little, too late for people who are struggling to stay warm right now and who will face the same situation next year. What is more, it is still not clear what that £6 billion will be used for, so can the Minister explain what exactly it will be allocated to? Is it for the establishment of new schemes or the continuation of existing ones such the social housing decarbonisation scheme?

Will the Minister also confirm when we will get more details about the energy efficiency taskforce? For months, I and many others have called for a nationwide, street-by-street, local authority-led, home energy efficiency programme to genuinely insulate households from high bills for the long term. It really is not rocket science. Just last week, the Environmental Audit Committee, of which I am a member—I am very pleased to see the Chair, the right hon. Member for Ludlow (Philip Dunne), with us this morning—released a new report calling for what we called a national “war effort” on energy saving and efficiency, with upgrading homes to energy performance certificate C or above to be treated as a national priority.

That would deliver a massive benefit to our constituents. Citizens Advice estimates that upgrading all UK homes to EPC C would save households nearly £8.1 billion a year at current prices. UK homes are notoriously leaky. They lose heat three times faster than those in other parts of Europe, which means that our constituents are more vulnerable to high global gas prices than their neighbours.

Like my hon. Friend the Member for Stirling (Alyn Smith), I congratulate the hon. Member on securing this debate. She is referring to the appallingly bad standard of insulation in the United Kingdom’s homes. I do not know if she is old enough, but I remember protesting as a student in the 1970s against a new nuclear power station at Torness on the east coast of Scotland. Even at that time, it was identified that if the money that it would cost to build a nuclear power station had been spent on insulating homes and buildings, the energy saved would have been significantly more than Torness could produce. Does she agree that the short-sighted, almost religious zealot-like fascination with nuclear power in the United Kingdom has been damaging our energy prospects for a great many years and has got to stop?

I thank the hon. Member for his intervention, with which I agree 100%. The nuclear obsession is using vast amounts of money, diverting attention and also sending mixed signals to investors, who really do not know what kind of energy future this country is planning for itself. It is a massive white elephant. Nuclear power stations are not coming in on budget and on time anywhere, and the idea that we can now achieve that here in the UK, against all the evidence in so many other countries—and, indeed, against the evidence here at home with Hinkley, for example, which is massively over budget and massively late—beggars belief.

I, too, congratulate the hon. Lady on securing this debate, and on her important contributions to our deliberations on the Environmental Audit Committee. Just before getting diverted on to nuclear, she mentioned the importance of the energy efficiency taskforce, on which I completely agree with her. Does she agree that when the Government choose to respond to the report we published as a Committee earlier this week, which she mentioned, it would be most helpful if they took this opportunity to clarify what the taskforce’s terms of reference and primary objectives will be, so that it can be used as a Government-inspired device to accelerate this national mobilisation of energy efficiency, which we all agree needs to be undertaken?

I thank the right hon. Gentleman for his intervention and his kind words. I absolutely agree: the taskforce has a real potential to make a difference, but we are still in the dark about many of the details. If the Government gave us more information, it would give a lot of comfort to a lot of people to know that there is a guiding mind that will ensure we accelerate these urgent installations of energy efficiency.

I turn to oil, gas and fossil fuels. Just as it was political choices that led to families being unable to heat their homes, so was it a political choice by the Government to protect the oil and gas companies, whose profits have grown fat from the spoils of war. As households struggle to make ends meet and our planet burns, the Government have chosen to double down on the very thing that is at the heart of these multiple crises. The UK is set to grant more than 100 licences to explore for more oil and gas in the North sea. Although the windfall tax has been increased to 35%, bringing the total tax on oil and gas to about 75%—I note, in parentheses, that that is still lower than Norway’s, at 78%—it is genuinely incomprehensible that the Government have failed to remove what is being called the gas giveaway, which means that oil and gas companies will still be able to claim £91.40 in tax relief for every £100 invested. What is more, from 1 January, a company spending £100 on so-called upstream decarbonisation—essentially reducing emissions from the process of extracting oil and gas, which of course then goes on to be burned—is now eligible for £109 relief on every £100 invested. In other words, we are paying the oil and gas companies to do the decarbonisation that they should be paying for. They are not broke; they are literally saying that they have more money than they know what to do with. I suggest that they start actually paying their own way.

New oil and gas extracted from the North sea will neither deliver energy security nor bring down bills, but will inevitably come at huge cost to the taxpayer. The hon. Member for Bath (Wera Hobhouse) mentioned Rosebank, the UK’s largest undeveloped oilfield. The costs to the taxpayer if it goes ahead are enormous. At triple the size of the neighbouring Cambo oilfield, if Rosebank is developed it would produce more emissions than 28 low-income countries combined, or the carbon dioxide equivalent of running 58 coal-fired power stations for a year. It is estimated that if it is developed, its owners would receive more than £500 million of taxpayer subsidies, as the hon. Lady said, thanks to the investment allowance—the gas and oil giveaway—in the energy profits levy. If that £500 million were not used for those subsidies—subsidies to burn our planet more—it could be used to extend free school meals to every child whose family receives universal credit. It could be used to pay the annual salaries of more than 14,000 nurses or build one new medium-sized hospital. It is genuinely baffling that the Government think that that is the best use of £500 million at any time, let alone now.

The hon. Lady is being generous with her time. I may pre-empt what she was about to come on to. In concluding her remarks on alternative renewable energy sources, will she commend to the Minister the work the Government have already done in allowing contracts for difference to be available to tidal energy systems, to provide renewable baseload electricity supply, which at the moment is a critical shortcoming in the plans?

I certainly welcome that intervention and agree entirely on welcoming the use of the contracts for difference mechanism. Tidal has huge potential and that is one way to maximise that. As the right hon. Gentleman knows, we will be looking this afternoon in the Environmental Audit Committee at ways in which we can unblock more solar power, for example, by enabling the batteries, alongside household solar, to be installed retrospectively at lower VAT rates. It is odd that, at the moment, there are reductions on VAT for solar panels but not for the batteries for households that want to store energy.

On that point, does the hon. Lady agree that the Government should seek to incentivise further private domestic installation of solar panels or ground-source heat pumps by considering an offsetting of the investment against income tax?

I thank the hon. Lady for that proposal, which is not one I have looked at, but which sounds interesting. I would be interested to know what the Minister thinks of that.

I will bring my comments to a close simply by saying that, in responding to the multiple crises that I have set out this morning, it is important that we do not store up more problems for the future. Rather than harking back to the fossil-fuel era, I ask the Minister one more time if he will finally prioritise the quickest and cheapest way to bring down bills for the long term, and introduce that desperately needed street-by-street home insulation programme. Again and again, we have seen Government schemes that are not working. The green deal scheme and green homes grant both collapsed and did massive damage to supply chains, with businesses unable to have confidence in what the Government were introducing.

We urgently need an end to the fossil-fuel era, which was kickstarted by coal and colonialism. Instead, we need resilience for the long term, with good green jobs in every constituency, warm homes that are not vulnerable to global gas prices, and the abundance of renewable energy with which these nations are blessed. Only then can we avoid future energy crises, create a more prosperous society and ensure that everyone shares in a transition to a zero-carbon economy.

I remind Members to bob if they wish to be called in the debate.

Thank goodness, they are. I call Derek Thomas.