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To ask His Majesty's Government what assessment they have made of the impact on farmers of the higher cost of red diesel following the closure of the Straits of Hormuz; and what steps they will take to alleviate any difficulties of increased costs and lack of supply.
To ask His Majesty's Government what assessment they have made of the impact on farmers of the higher cost of red diesel following the closure of the Straits of Hormuz; and what steps they will take to alleviate any difficulties of increased costs and lack of supply.
This Government is aware there have been increases in the price of red diesel as a result of volatility in international markets, influenced by the continued instability in the Middle East. This Government is taking decisive action to support fishers and farmers by cutting the duty on red diesel to its lowest rate in over 20 years, reducing the rate on red diesel by a third.
This Government speaks regularly with the fuel industry, and the UK remains well stocked for all fuel types.
Lords question for short debate on what assessment they have made of the impact of the Clean Power 2030 Action Plan upon rural communities.
Lords question for short debate on what assessment they have made of the impact of the Clean Power 2030 Action Plan upon rural communities.
My Lords, does the Minister not agree that Denmark—where renewables, on which Denmark excels, are highly developed—is the largest producer of oil and gas in the European Union? We will continue to need fossil fuels, in addition to renewables, going forward.
My Lords, does the Minister not agree that Denmark—where renewables, on which Denmark excels, are highly developed—is the largest producer of oil and gas in the European Union? We will continue to need fossil fuels, in addition to renewables, going forward.
The reference that the noble Baroness makes to Denmark is an interesting one, inasmuch as the Danish system is wholly integrated between renewables, heat and power of different kinds—particularly district heating and various such things, which can be used in conjunction with other forms of energy to provide a balanced overall system. It is true that Denmark continues to produce oil and gas but also that Denmark is, along with the UK, looking at methods of making sure that relates to production for the future rather than exploration.
My Lords, the noble Baroness will be aware that the 5% hardest to reach in rural areas are being further disadvantaged by the taking out of landlines. Storm Arwen took all the landlines and mobile phones out over a large area of the north-east and north Yorkshire for nine days. People must be able safely to summon help in an emergency. That will not happen if these landlines are taken out.
My Lords, the noble Baroness will be aware that the 5% hardest to reach in rural areas are being further disadvantaged by the taking out of landlines. Storm Arwen took all the landlines and mobile phones out over a large area of the north-east and north Yorkshire for nine days. People must be able safely to summon help in an emergency. That will not happen if these landlines are taken out.
The resilience of our network is absolutely critical. A fibre network is more resilient to many shocks, so the move to fibre will provide more resilience in the future. It is very important that in this transition from the PSTN to the fibre network, vulnerable customers are supported and have the back-up they need in cases of power cuts, and so on. The transition from the PSTN to the other network has already taken place for a large number of consumers in this country and is well on track towards the final handover.
My Lords, I refer to my interest as honorary president of National Energy Action. The warm home discount—for those households in greatest fuel poverty—has remained at £300 for the last few years. What plans do the Government have to increase that figure so that the poorest, most fuel-impoverished households will receive more money off their bills?
My Lords, I refer to my interest as honorary president of National Energy Action. The warm home discount—for those households in greatest fuel poverty—has remained at £300 for the last few years. What plans do the Government have to increase that figure so that the poorest, most fuel-impoverished households will receive more money off their bills?
Clearly, it is absolutely critical that we support families who struggle to pay their electricity bills. We do not want people to
be cold in the winter. I am not aware of any plans to increase that payment at the moment; I will get back to the noble Baroness if I am wrong. It is important to bring down bills but also to work with energy companies on their support for vulnerable customers, because there is a role for energy companies to play in that aspect.
To ask His Majesty's Government what assessment they have made of the impact of the increase in energy bills on the most vulnerable households; and what steps they will take to mitigate the effects this winter.
To ask His Majesty's Government what assessment they have made of the impact of the increase in energy bills on the most vulnerable households; and what steps they will take to mitigate the effects this winter.
In November Energy UK, in collaboration with the Government, published a Winter 2024 Commitment for this winter which promises £500m of industry support to billpayers this winter. It also outlines how fifteen energy suppliers representing almost the entire market will continue to provide a range of financial support tailored to the needs of their customers. Together with our Warm Home Discount, eligible households who are struggling to pay their energy bills this winter will receive £1 billion of support.
We will continue to provide substantial funding to Local Authorities to support those most in need. At the Autumn Budget 2024, the Government announced that £1 billion, including Barnett impact, will be invested to extend the Household Support Fund (HSF) in England by a full year until 31 March 2026, and to maintain Discretionary Housing Payments in England and Wales.
My Lords, I congratulate the Government on organising the Farm to Fork summit but echo the sentiments of the noble Baroness who asked the Question. Does my noble friend share my concern that farmers are not receiving these increasing costs, which they are covering, of energy prices and food production, added to the shortage of staff? Will the Government use every opportunity to investigate the rising profits that the supermarkets are recording?
My Lords, I congratulate the Government on organising the Farm to Fork summit but echo the sentiments of the noble Baroness who asked the Question. Does my noble friend share my concern that farmers are not receiving these increasing costs, which they are covering, of energy prices and food production, added to the shortage of staff? Will the Government use every opportunity to investigate the rising profits that the supermarkets are recording?
I take note of my noble friend’s point on the Farm to Fork food summit, which allowed the sector to get together, discuss the future, provide further innovative methods on food supply and discuss the current situation. Supermarkets’ profit margins are actually surprisingly low; I have some figures that I can pass on.
My Lords, has my noble friend made an assessment of the amount of water needed to create hydrogen for use in energy technology? Is this going to be an issue in areas of the UK that might be water-stressed at this time?
My Lords, has my noble friend made an assessment of the amount of water needed to create hydrogen for use in energy technology? Is this going to be an issue in areas of the UK that might be water-stressed at this time?
If there is one thing many parts of the UK are not short of, it is water. The noble Baroness’s point is partly valid in that we need substantial quantities of water for producing electrolytic hydrogen, which is fundamentally electricity and water, so that is something we need to bear in mind in terms of location.
My Lords, what could be easier to source and more nutritious than locally produced food? Will my noble friend the Minister and the Government endeavour to ensure that there are more locally sourced meat, fruit and vegetables available for schools and other public sector organisations, such as prisons and military garrisons?
My Lords, what could be easier to source and more nutritious than locally produced food? Will my noble friend the Minister and the Government endeavour to ensure that there are more locally sourced meat, fruit and vegetables available for schools and other public sector organisations, such as prisons and military garrisons?
The Government absolutely support the spirit of my noble friend’s remarks in terms of supporting the local economy and making sure that children and others—in hospitals and elsewhere—who receive government-funded meals get the highest quality. It is important, however, that they have the flexibility and discretion to decide for themselves how they source the food.
To ask His Majesty's Government what plans they have (1) to reduce the standing charge on domestic household bills, and (2) to charge this to the recent profits announced by electricity distribution companies.
To ask His Majesty's Government what plans they have (1) to reduce the standing charge on domestic household bills, and (2) to charge this to the recent profits announced by electricity distribution companies.
The setting of the standing charge is a commercial matter for individual suppliers. Under the Price Cap, a supplier’s default and standard variable tariffs unit rate and standing charge together must not exceed the level of the cap set by Ofgem.
The profits made by distribution network companies are regulated by Ofgem through the price control to ensure sufficient incentives for networks to deliver for consumers, whilst protecting consumers from high costs. The next price control begins in April, where returns for these companies will be set lower than previous price controls.
My Lords, is this not an opportunity for the Government, in rolling out their digital programme, to ensure that this area is properly regulated? Could Ofcom not play a crucial role here? All of us are bound by our contracts, as my noble friend the Minister rightly pointed out, which in most cases are locked in for 24 months, and we are going to face an average 11% increase. For vulnerable households, this is just too much.
My Lords, is this not an opportunity for the Government, in rolling out their digital programme, to ensure that this area is properly regulated? Could Ofcom not play a crucial role here? All of us are bound by our contracts, as my noble friend the Minister rightly pointed out, which in most cases are locked in for 24 months, and we are going to face an average 11% increase. For vulnerable households, this is just too much.
Ofcom does have an important role to play here as the independent regulator, but, as I say, mindful of the particular challenges that households are facing, my right honourable friend the Secretary of State spoke directly to companies, asking them to consider very carefully the decisions they are making and the impact on their customers.
To ask His Majesty’s Government what steps they are taking to help vulnerable households with energy costs; and what is the role of Ofgem in delivering affordable energy.
To ask His Majesty’s Government what steps they are taking to help vulnerable households with energy costs; and what is the role of Ofgem in delivering affordable energy.
I pay tribute to the Government’s warm home discount scheme and accept that it has been an enormous success. Recently, the chief executive of Ofcom has asked for a serious assessment of introducing a social tariff. Given the fact that Citizens Advice recognises that there has been an excess profit of £7.9 billion this year for electricity distribution companies, will my noble friend do one of two things: either introduce a new social tariff or increase the warm home discount? Instead of asking other households to pay for it, will he ask the electricity distribution companies to pay for the increase?
I pay tribute to the Government’s warm home discount scheme and accept that it has been an enormous success. Recently, the chief executive of Ofcom has asked for a serious assessment of introducing a social tariff. Given the fact that Citizens Advice recognises that there has been an excess profit of £7.9 billion this year for electricity distribution companies, will my noble friend do one of two things: either introduce a new social tariff or increase the warm home discount? Instead of asking other households to pay for it, will he ask the electricity distribution companies to pay for the increase?
There were a lot of questions there. The issue around social tariffs is that the warm home discount was introduced in the first place to replace various social tariffs on offer because this was considered to be a better way of supporting vulnerable households, but we always keep these things under review. I did not quite understand my noble friend’s point about excess profits. If she was talking about suppliers, many suppliers have actually gone bankrupt; they are not making excess profits. If she was talking about generators, we have already imposed an excess profit levy on generators.
My Lords, following up that point, does my noble friend agree that energy from waste is very much the way forward, and will he ensure that any benefits go to the local community from electricity generated from waste?
My Lords, following up that point, does my noble friend agree that energy from waste is very much the way forward, and will he ensure that any benefits go to the local community from electricity generated from waste?
I am happy to agree with my noble friend that energy from waste is an excellent production technique. There are many successful energy-from-waste projects; it is another technology that will make a contribution to our energy supply.
My Lords, my noble friend will be aware that those living in rural areas pay the highest cost of fuel, which is not covered by the price cap. I am thinking of oil, solid fuels and LPG. What plans do the Government have to extend the price cap to these fuels to help those living in rural areas, particularly in the north of England and other parts of the country where it is particularly cold in the winter?
My Lords, my noble friend will be aware that those living in rural areas pay the highest cost of fuel, which is not covered by the price cap. I am thinking of oil, solid fuels and LPG. What plans do the Government have to extend the price cap to these fuels to help those living in rural areas, particularly in the north of England and other parts of the country where it is particularly cold in the winter?
Of course, a number of people across the country live off the gas grid and use oil, LPG, et cetera. The noble Baroness is right that in
most cases they benefit from the electricity cap, but they do not benefit from the gas cap. We are looking at how they can be assisted. We have a commitment that they will receive an equivalent level of support and we will ensure that that is the case.
My Lords, I declare my interests in respect of National Energy Action.
I welcome Ofgem’s ruling that overpayments of grossly inflated direct debits will be rectified. However, does my noble friend not question why the standing charge on each household bill has increased by up to 50%, given that this goes to distributors whose costs have not increased to the same extent as those of electricity suppliers? Should this not be urgently investigated?
My Lords, I declare my interests in respect of National Energy Action.
I welcome Ofgem’s ruling that overpayments of grossly inflated direct debits will be rectified. However, does my noble friend not question why the standing charge on each household bill has increased by up to 50%, given that this goes to distributors whose costs have not increased to the same extent as those of electricity suppliers? Should this not be urgently investigated?
Ofgem does look very closely at connection cost standard charges and direct fuel costs. Funding the transition from a big node-type power supply to lots of more diverse, renewable sources of energy requires considerable investment in our transmission system. In order to expand the use of
electric cars, heat pumps et cetera, we must reinforce the electricity supply system, which of course needs to be paid for.
To ask Her Majesty's Government what assessment they have made of the impact of the increase in energy costs for those living in rural areas; and what plans they have to alleviate those additional costs.
To ask Her Majesty's Government what assessment they have made of the impact of the increase in energy costs for those living in rural areas; and what plans they have to alleviate those additional costs.
The Government believes it is essential that consumers of liquified petroleum gas and heating oil receive a fair deal. A competitive market allows consumers of both fuels to shop around for the best price for each delivery. The Government believes this provides the best long-term guarantee of low prices.
Support is available to eligible off-grid households through the Warm Home Discount, the Winter Fuel Payment and the Cold Weather Payment.
Lords question for short debate on what assessment they have made of the effect of rising energy costs on households, and in particular (1) pensioners, and (2) those on low incomes.
Lords question for short debate on what assessment they have made of the effect of rising energy costs on households, and in particular (1) pensioners, and (2) those on low incomes.
To ask Her Majesty’s Government what assessment they have made of the rising costs of wholesale energy prices, and of their impact on household electricity bills.
To ask Her Majesty’s Government what assessment they have made of the rising costs of wholesale energy prices, and of their impact on household electricity bills.
My Lords, the largest element of gas and electricity bills, which is wholesale costs, has increased significantly. The Government are committed to protecting customers, especially the most vulnerable. Households will continue to be protected throughout the winter by the price cap and through the warm Home discount and the winter fuel payment and cold weather payment schemes. A new £500 million household support fund has also been made available to councils to help the most in need over the winter.
Given the record rise in wholesale gas prices and the fact that many fuels such as heating oil, coal and LPG, on which many rural dwellers depend, are not covered by the price cap, will the Government immediately lift the green levies on household bills, which account for 25% of the total, but ensure that energy companies pay for the green infrastructure from which they will ultimately profit, while targeting all available financial resources on those on the lowest incomes with the least efficient homes, to ensure that a further 1.5 million are not forced into fuel poverty?
Given the record rise in wholesale gas prices and the fact that many fuels such as heating oil, coal and LPG, on which many rural dwellers depend, are not covered by the price cap, will the Government immediately lift the green levies on household bills, which account for 25% of the total, but ensure that energy companies pay for the green infrastructure from which they will ultimately profit, while targeting all available financial resources on those on the lowest incomes with the least efficient homes, to ensure that a further 1.5 million are not forced into fuel poverty?
Heating oil and LPG are of course not covered by any of the levies that my noble friend refers to—that is, they are separately controlled. There is a free market in them and they have not gone up nearly as much as gas prices. But as with every other utility, the energy companies pass through the cost of investment in the sector’s networks to end consumers, as well as the cost of additional energy infrastructure investment and environmental and social policies.