Date: 2023-04-19
Abena Oppong-Asare: It is a pleasure to speak for the Opposition on the clauses relating to the electricity generator levy, a policy that was first announced in the autumn statement of 2022. Clause 278 introduces a new 45% charge on businesses that generate electricity in the UK. Specifically, it will be charged on exceptional earnings related to soaring energy prices. Extraordinary profits are defined in the Bill as receipts from wholesale electricity sold at an average price in excess of a benchmark price of PS75 per megawatt-hour over an accounting period. Clause 280 specifies that this benchmark will be adjusted in line with the consumer prices index from April 2024. Companies liable for the levy are those that produce more than 50 GWh annually, generate electricity in the UK from nuclear, renewable or biomass sources, and are connected to a local distribution network or to the national grid. The levy will apply only to exceptional receipts exceeding PS10 million. The clauses under discussion also set out in detail methods of calculation and procedures for joint ventures. I note that the Government have estimated that the levy will raise approximately PS14 billion over the next five  years and will help to fund public services and support for households and businesses with increased energy bills. Although Labour welcomes this move and will not oppose the inclusion of these clauses in the Finance Bill, I have to say that I have followed the Government's developments in this area with dismay. Back in January 2022, Labour announced that it would introduce a windfall tax on oil and gas producers. We announced in August 2022 that we would cap energy bills. In the same month, we also announced that we would scrap extra charges for those on pre-payment meters. It is Labour that has been developing policies to tackle the energy crisis and support consumers and businesses that are suffering as a result of the Government's inaction. Thirteen years of failed Conservative energy policy have resulted in higher bills, energy insecurity, and the UK losing the global race for jobs. The British people are sick and tired of soaring energy bills and of our energy system being so exposed to the whims of dictators such as Putin. The British people want long-term solutions to cut bills for good, and it is Labour that is offering those solutions. The clauses for discussion today and the detail that the Government have given so far, still leave some questions unanswered. Will the Minister explain what measures the Government will take to ensure that this levy does not hamper investment in the renewables sector, given that low-carbon electricity generation is subject to the levy. The Government's botched windfall tax on oil and gas companies comes alongside an investment allowance, but this levy does not. Does that say anything about the level of importance that the Government assign to the renewables sector, the importance of investment in net zero, and the role that they see Britain playing in the green race? Given the importance of the renewables sector in reaching our net zero targets, I am sure that the Minister will agree that it is important that the measures in these clauses are monitored and evaluated. Will he elaborate a little as to how the electricity generator levy will be monitored and what cross-departmental work the Treasury will be doing alongside the Department for Energy Security and Net Zero in this area? To conclude, the Opposition have real concerns about the Government's energy policy. Although we support the electricity generator levy, we do have some serious questions for the Government. We need to see greater security detail on these to give the sector certainty and to ensure that these measures do not stifle investment in renewables.