Energy (Oil and Gas) Profits Levy Bill — House of Lords, 2022-07-13
Topic: Energy
Robin Teverson (Liberal Democrats, Centre to centre-left): My Lords, I congratulate the noble Lord, Lord Sikka, on his forensic analysis of the market. It was quite astounding. He is an accountant, so he has to be right—we know that, in the western world. I thank him for that, and I look forward to the now extended half-an-hour reply from the Minister to his questions I have to say that one of the things that I like about the Bill—let us start off with the positive things—is that to some degree it is fiscally responsible. The Government are spending something a mere £37 billion—the Minister will correct me—on trying to solve the crisis in price increases, and here we have a Bill that, while it is not hypothecated, puts some £5 billion estimated back into the Treasury to pay for that. One of the reasons I welcome the Bill is because now, whenever I see a Conservative Party letterhead and that tree that is its logo, I think of it as the magic money tree. That has gone from rhetoric aimed at the Opposition Benches to the Government Benches because of the first round of the Tory leadership competition, where we had absolutely zero fiscal responsibility of any sort whatever. Maybe these are the last vestiges. Maybe the noble Lord, Lord Moynihan, will be rewarded by the fact that, if one of those now remaining eight candidates —or six or whatever it is—get in, this will probably disappear due to low tax and high spend. It will be interesting to see My noble friend Lady Kramer is absolutely right. At the end of the day, the core of this is the fact that households are having to pay huge amounts of extra money for their energy, and it is a real challenge to them. I quoted this figure in Grand Committee yesterday in a debate on an SI. Looking at myself, my standing order to Octopus Energy at the beginning of the year was £212 a month; this month, I paid £355. That is a huge increase, and one which I am fortunate enough to be able to afford—although even I blinked. However, to many of the households in this country, not least the 3.5 million households that were in fuel poverty before these prices even rose at all, it will be a huge challenge One of the sad things about that £37 billion that is going into trying to solve this crisis in the short term is that it is money just to stand still. There is no investment in there in energy efficiency or putting our housing stock right—all those challenges that we need to meet. It is just money that is coming through the Treasury and, importantly, out to households again. However, if these high energy prices continue, that will not have solved that problem one little bit When the noble Baroness, Lady Bennett, mentioned Scott Morrison, it was like a voice from the past. I thought I had forgotten that name forever, and I wish that I had. I hope that Anthony Albanese, who has now taken over, will now very much change the southern hemisphere’s look at climate change. I come back to Norway, which seems to have dominated this debate to a degree. The great thing about Norway, of course, is that it has a sovereign wealth fund, one of the largest in the globe, which is invested internationally and well, and is a great asset, whereas we in the United Kingdom have no sovereign wealth fund whatever, despite having depleted those resources in the North Sea. I am not pointing the finger at anybody or at any particular party, but one of the tragedies is that we have not used that ability to invest in our future No doubt this is a tilt back to the carbon economy rather than the clean economy—one of energy efficiency led by renewables. I would like to ask the Minister a question. I read through what was allowed or not for investment—the noble Baroness will excuse me if I did not read it sufficiently well—and I wanted to understand whether investment in new fields in the North Sea was allowed. Would it include that, depending on how long this levy lasts for, or is it just around—I say "just" carefully—greater extraction from existing resources I would also like to ask the same question that the noble Lord, Lord Sikka, did. Although I understand that this £5 billion is a net figure after the investment incentive, I would be very interested indeed to understand whether that is the case or what the Government are forecasting with regard to the take-up of that investment On a minor point—I do not want to take the House’s time up on it hugely—it seemed to me when I read through the Bill that it took up a huge amount of space to make sure that nothing recycled was used. I can sort of understand all that, but it does not say a lot about the circular economy to a degree. I would hugely prefer recycling rather than new equipment, but maybe that is a small thing This industry is moving towards carbon capture and storage, which is perhaps more beneficial—I am slightly sceptical about CCS, but the Climate Change Committee tells us that it is a key part of meeting net zero. Is investment in carbon capture and storage included in this Contracts for difference were mentioned by someone—was it the noble Lord, Lord Moynihan? Sorry, it was the noble Baroness, Lady Bennett. Sorry I mixed the two up—their views and speeches are so similar. Where we have contracts for difference, this problem of excess profits is solved. The Treasury, through the contracts company, is doing very well at the moment, because the strike price on contracts for difference is well below the current wholesale or reference price for electricity. If we have those sorts of mechanisms—introduced by a Liberal Democrat Secretary of State for Energy and Climate Change—we solve these things automatically. I think there are ideas to apply that to the traditional power sector as well, which would indeed be interesting As my noble friend said, we see ourselves—no doubt, along with others in the House—as progenitors of this legislation, to which the Government were very late to the table, but we are at the crossroads, a fork, in energy policy. There are the siren sounds of, "Hang on a minute. Let’s take the route back to fossil fuels to put this right. Guys, it’s only temporary; we’ll invest in new fields, but we will still be in transition." There is a real danger here. We have seen that in the leadership contest for the government party at the other end of the Corridor, during which this issue has not been seen as sufficiently important by candidates and their campaigns. We really are at a fork Lastly, I put a challenge to the Minister. Just to make sure I am wrong, can she confirm that the Government will not approve the coal mine in Cumbria?