Date: 2023-04-19
James Cartlidge: It is a pleasure to respond to the hon. Member for Brighton, Pavilion (Caroline Lucas). I hope that she will not take it as a lack of respect if I say that it is probably a good thing that she did not go for the full one-and-a-half hours, but she made important points to which I will respond. Both she and the Labour Front Bencher, the hon. Member for Erith and Thamesmead (Abena Oppong-Asare), asked about the impact on investment. New clause 11, in the name of the hon. Member for Brighton, Pavilion, specifically proposes that the Government publish within six months an assessment of the impact of the EGL on investment in renewables,  and a comparison with the impact of the energy profits levy. First, I am bound to say, in the immortal words of the Treasury, that we keep all policies under review. We will, in the course of normal tax policymaking, return to make an assessment of the EGL's impact at a suitable time. On investment specifically, we have to appreciate that this country has led the way in securing investment in renewables. Bloomberg New Energy Finance data shows that the UK has secured nearly PS200 billion of public and private investment into low-carbon industries since 2010. Generators have received to date almost PS6 billion in price support from the contracts for difference scheme for low-carbon electricity generation. CfDs have contracted a total of 26 GW of low-carbon generation, including around 20 GW of offshore wind. I hope that we are all proud of the result, which is that we as a country now have the largest array of offshore wind in Europe. Going forward, we have committed PS160 million for the floating offshore wind manufacturing investment scheme to support floating offshore wind, and up to PS20 billion for early deployment of carbon capture, usage and storage. Our record to date is also crucial. The hon. Member for Brighton, Pavilion spoke about the Inflation Reduction Act and the steps being taken in the US. Of course, that is important, and we watch what is happening there very carefully, but it is worth reflecting on the fact that, as she quite rightly said, about 40% of our electricity came from renewables last year, while in the US that figure was about 20%. There are two key things about the EGL and investment. First, we have to remember that the levy does not apply to the contracts for difference, which have been hugely successful in securing renewable energy investment and will cover the mainstay of future deployment in this country in relation to renewables. Secondly, the threshold price of PS75 per megawatt-hour is exceptional; it is about 50% higher than the average over the past decade. The extraordinary energy prices, driven by Putin's invasion of Ukraine, would not have been foreseen by investors when they committed capital to the building of wind and solar farms--they would not have foreseen such a huge increase. The hon. Lady, whom I respect, has made her key point about oil and gas consistently; in many ways, the Labour party's criticism of our investment allowance, which it calls a loophole, is the same point. We differ in our view. In the world today, we face a most profound energy crisis. It is a strategic energy crisis. We look at Russia, which has weaponised energy, and we ask ourselves: "Is it the right moment to be turning our back on our own domestic supply of oil and gas?" We need it. Of course, we are on the path to net zero--this country has cut its emissions more than any other nation in the G7; we are making that difference--but the journey is a long one. In that time, we will need oil and gas, which make up about three quarters of our energy demand when all transport is included. Unless the hon. Lady and the Labour party think that we should stop using oil and gas tomorrow, what they are really arguing for is simply to use more imported oil and gas.