PARLIAMENTARY DEBATE
Energy Transition - 6 January 2026 (Commons/Commons Chamber)

Happy new year to you, Mr Speaker, and to colleagues across the House. I have temporarily lost hearing in one of my ears so if I am shouting or do not hear every detail of the questions, I apologise in advance.

This Government are determined to strengthen our energy security by moving away from volatile fossil fuels and delivering a clean power system. We have switched off the last coal power station in the UK and have consented enough clean power to power the equivalent of 7.5 million homes. That is how we will tackle the climate crisis, strengthen our energy security and create good jobs across the country.

The International Renewable Energy Agency reports that in 2024, China installed five times more renewable power than Europe and eight times more renewable power than the United States. In the same year, more than two thirds of our liquid natural gas in the UK came from the United States. In the difficult geopolitical situation we find ourselves in, how are the Government making the UK more self-sufficient for our energy supply?

It is a hugely important question. In an increasingly uncertain world, our energy security becomes more and more important, and that is why we are determined not only that we build a clean power system to tackle the most existential crisis that the planet faces—the climate crisis—but that we have home-grown power here in the UK that we control; that is hugely important. Every step we are taking to invest in renewable energy and a new generation of nuclear helps us to do that, but it is also, of course, the economic opportunity of the century, which delivers our energy security and jobs at the same time.

I call the Chair of the Energy Security and Net Zero Committee.

Happy new year, Mr Speaker.

I hope that the Minister, in his new year’s resolutions, will commit to building the case for the energy transition through lower consumer bills, secure jobs, public health improvements through reduced emissions, and indeed energy security. Does he agree that those who oppose climate action are denying our children and grandchildren a future? Will he endeavour to make the case also to fight against the misinformation, disinformation and outright myths peddled by some Opposition Members?

Typically, my hon. Friend is right on these points, and yes, it is one of my new year’s resolutions—and I suspect one of my ministerial colleagues’ resolutions as well—for us to redouble our efforts to make the case for this. Just this morning I was reading about yet another study that shows that we underestimate the level of support in the general public for climate action. We have to remember that while there is a lot of noise around this at the moment, the reality is that the public back action on the climate, and it is the right thing to do not just for future generations, as my hon. Friend rightly says, but for our energy security and for good jobs.

Refined hydrocarbon fuels are excluded from the Government’s carbon border adjustment mechanism, meaning that although UK refineries face emissions trading scheme costs of £50 per tonne, overseas fuel producers do not. That is clearly incomprehensibly damaging in economic terms and is self-evidently counterproductive when it comes to climate goals. In terms of energy security, it is pure madness. Refining at Grangemouth and Prax Lindsey are two early casualties of Labour’s failure to understand basic economics. Will the Government now act to protect the four remaining refineries in GB, or will Labour continue with its policy of deindustrialisation dressed up as decarbonisation?

Well, I say a happy new year to the hon. Gentleman, as we see his sunny disposition back in this House again!

First, we committed in the Budget to looking at the CBAM inclusion and are working to make that happen. Secondly, of course I have been working with all the refineries to make sure that they are as sustainable as possible. Thirdly, I think the hon. Member has an absolute cheek to come here and talk about deindustrialisation when his party has failed to have an industrial strategy in Scotland for the 18 years it has been in power and when, just before Christmas, it published the flimsiest of flimsy plans for energy security in Scotland, which was mostly made up of pictures and not by any detail. His party has absolutely no credibility on these issues whatsoever.

I call the Chair of the Environmental Audit Committee.

There are many corporate customers who are keen to decarbonise but find that grid connection forecasts of five or more years stand in their way. Will the Minister tell us what he is doing to speed up business connections to the grid and to ensure that we prioritise those business customers who will make the biggest difference in decarbonising?

My hon. Friend raises a hugely important point. The future of the grid is going to be absolutely critical not only to how we get clean power to homes and businesses across the country to bring down bills, but to how we deliver the economic growth the country needs. That is why we have taken two key actions, the first of which is to build the grid we need for the future. That has been opposed by some Opposition Members, but it is critical that we build that future grid. Secondly, we are clearing out the connections queue so that there is space for more projects, like the ones he mentions, to join. Both those actions are critical, and those who oppose the building of new grid infrastructure oppose the exact economic opportunities that my hon. Friend has mentioned.

Could the Minister explain why the Government have rejected a higher bid for the Lindsey oil refinery that would have kept jobs, kept the refinery open and attracted more investment in favour of a lower bid that is destroying jobs, is mothballing the refinery and is against the growth interests that the Government profess? Can he also confirm whether or not the taxpayer is retaining the decommissioning liabilities of the oil refinery?

First, on a positive note in the new year, I believe the hon. Gentleman had some good news over Christmas—I congratulate him on it. He is quite wrong, though, on his question. I should set out, as I did in my oral statement on the Lindsey oil refinery, that this was an insolvency process and it was therefore for the official receiver to conclude the sales process, which it has done. It has taken the highest bid that was on the table. P66 will now take forward the future of that site in a sustainable way and I will continue to work with it on that question. The Government do not retain decommissioning liabilities; they were part of the deal and P66 will take them along with the site.

Happy new year, Mr Speaker.

We are facing an affordability crisis in this country, and indeed across high-income nations, because of our dependence on fossil fuels. That is why energy prices here have risen by 40% since 2021. Our constituents feel that this is damaging our country and, more importantly, it is damaging the faith that people across this nation have in our democracy to deliver for them. Can the Minister set out how our transition to fossil fuels will help to resolve the affordability crisis and restore faith in this place?

That is an important question on two fronts. My hon. Friend rightly mentioned that the transition away from fossil fuels is hugely important for our energy security and for future generations. We in this place have a huge responsibility to safeguard the future of our planet for the generations still to come. His second point was, rightly, that we need to make the case for why this is important now. It is about how we get away from the volatility of fossil fuel prices, which so many of our constituents are still paying the price for, and how we industrialise communities right across the country. Tens of thousands of jobs have been created through the renewables that are already in place and we want to see hundreds of thousands of jobs by building much more of this infrastructure in the UK; that is how we get an economic advantage as well as energy security.

I call the shadow Minister.

In the consultation paper on the future of the North sea, the Government defined windfall prices as $90 a barrel for oil and 90p a therm for gas. Can the Minister tell me the prices of oil and gas today?

We have been really clear that the energy profits levy comes to an end in 2030. We have also put in place what the future of that scheme looks like to provide certainty for the long-term future. Of course, the energy profits levy was introduced by the hon. Lady’s party in government. We have been really clear that the energy profits levy comes to an end in 2030 unless the price floor is triggered in the meantime. If the Conservatives are in favour of scrapping the levy, they also have to say where the billions of pounds that it generates will come from in order to fund the public services that our constituents rely on.

Either the Minister does not know the current price or he does not want to tell us. Oil today is $62 a barrel and gas 72p a therm—up to a third lower than what the Government themselves define as windfall prices. Despite that, they are still punishing our oil and gas industry with massive windfall taxes. The cost is 1,000 jobs lost every month, production set to halve in the next four years and almost complete dependence on foreign imports of oil and gas by 2030. This Government are going to be responsible for the death of one of our most important industries. Will the Government now end the oil and gas supertax, scrap the mad ban on new licences and finally back the North sea?

There are a number of points that I would challenge in the hon. Lady’s question. First, the floor was set by the Conservative party in government and we have not changed it. Secondly, she talks about thousands of jobs lost every month. That is from an important study that was done by a university; it is not a reflection of what has actually happened in the last few months. Although I absolutely take seriously modelling like this, I think we do need to base it in the reality of what has actually happened. Every single job that is lost is of course hugely distressing for communities, but the hon. Lady should talk up the opportunities in the North sea. She says that we are talking down the North sea—in fact, it is her party that repeatedly talks down the opportunities for the future of the North sea in carbon capture and storage, hydrogen, oil and gas decommissioning work, and much, much more. She should talk up those opportunities and be ambitious for the future of the North sea, not talk it down.