Russian Oil Import Ban

– in the House of Commons at 1:52 pm on 9th March 2022.

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Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy 1:52 pm, 9th March 2022

With permission, I would like to make a statement on the UK’s phase-out of imports of Russian oil in response to Vladimir Putin’s brutal and illegal invasion of Ukraine.

First, I want to say what a privilege it was for all of us to hear President Zelensky’s historic address to the House yesterday. I am sure that all Members will join me in thanking him once again for his inspiring words and great leadership. It is with those words in mind that I come here today.

The UK joins key allies, including the United States, in halting the import of Russian oil, which makes up 44% of Russian exports and 17% of the Russian Government’s revenue through taxation. This action follows the most punishing set of sanctions that the British state has ever imposed on a G20 nation. Our trade, financial and personal sanctions are having an effect on the Russian economy. As I speak, the rouble has now fallen by nearly 42%, and the Moscow Exchange’s stock trading has been shut since 25 February. The British Government have sent a clear message to Putin’s regime and to those who support him in his war against Ukraine.

It is important to remember that Russia produces only a fraction of the fuel products currently imported in the UK. In a competitive global market for oil and petroleum products, demand can be met by alternative sources of supply. As a result of international revulsion at Putin’s invasion, Russian oil is already being excluded from much of the market, and currently it is trading at quite a sharp discount from other crude oil sources.

We want to go further. Yesterday I set out that the UK will be phasing out imports of Russian oil during the course of the year. This transition will give the market, businesses and supply chains more than enough time to substitute Russian imports. Businesses should use this year to ensure as smooth a transition as possible, so that consumers will not be affected. The Government will work with companies through a new taskforce on oil to support them to make use of this period in finding alternative suppliers. Yesterday I spoke with businesses, unions and representatives from the sector, and of course I and officials in the Department for Business, Energy and Industrial Strategy will continue to engage with and support British business.

Although Russian imports account for 8% of total UK oil demand, we should remember that the UK is a significant producer of crude oil and petroleum products. We participate in a global market for those products and we have resources in place in the unlikely event of supply disruption. Over the course of the year, the taskforce that we have set up will work closely with international partners, including the USA, the Netherlands and the Gulf to ensure alternative supplies of fuel products. Last week I addressed the International Energy Agency and tomorrow we will have an extraordinary meeting of the G7 Energy Ministers to discuss further steps.

Although businesses should do everything they can to secure oil from alternative sources, it is important to emphasise that they will still be able to import Russian oil during this transition period. These measures target oil-related products imports only. The UK is not dependent on Russian natural gas, which makes up less than 4% of our supply. However, I will be exploring options to end that altogether.

I want to make it clear to the House that we must end our dependency on all Russian hydrocarbons. In the meantime, we need more investment in North sea oil and gas production as we make the move to cheaper, cleaner power. Turning off domestic production at this moment, as some are calling for, would be completely the wrong thing to do. We are not going to do that. The Prime Minister has also confirmed that the Government will set out an energy strategy to explain the UK’s long-term plans for greater energy security, including renewable and nuclear power, building on our 10-point plan.

This measure to phase out Russian oil, and those being taken by our allies, will move the west away from dependency on Russian oil. It will take us on a road to building a stronger and more resilient British energy system. It will increase the growing pressure on Russia’s economy and, ultimately, hamper Russia’s ability to impose further misery on the Ukrainian people.

Photo of Ed Miliband Ed Miliband Shadow Secretary of State of Climate Change and Net Zero 1:58 pm, 9th March 2022

I thank the Secretary of State for his statement. We are united against Russian aggression. We stand together in solidarity with the Ukrainian people. Let me echo his admiration for President Zelensky, whose bravery and eloquence yesterday were extraordinary and inspiring.

On the Secretary of State’s immediate decisions, we know that Putin’s war machine is being funded by oil and gas, which is why it is right that every country does what it can to isolate the regime, and that every company does so too. We fully support the Government’s decision to ban oil imports, which is a welcome step. It is also right to work with companies and unions on how we implement that policy. What assessment has he made of the impact of the ban on petrol and diesel prices?

We also support the Secretary of State’s decision to seek ways of ridding ourselves of Russian gas imports. On the wider energy security context, it is essential that we learn the right lessons from this crisis. Although 50% of our gas comes from the North sea and only 4% from Russia, we pay the same price for our own gas as for that which we import because we operate in an integrated gas market, so we are absolutely exposed to these rocketing wholesale gas prices, which are currently up 100% on the month and 800% on the year.

Therefore, the right lesson to learn is surely that we have to go much further and faster in developing home-grown zero-carbon power, including renewables and nuclear, which can free us from the whims of autocrats and dictators who can use fossil fuels as a geopolitical weapon. Does the Secretary of State agree this is the right lesson and that policy will need to change? In particular, does he agree that we should finally end the effective moratorium on onshore wind in the planning regulations, which since 2015 has denied us power each and every year equivalent to our gas imports from Russia? Does he agree that we should ramp up our offshore wind so we go well beyond 40 GW, and that it is time to finally get serious about energy efficiency—the best way of cutting energy demand and an area in which the Government have not succeeded in past years?

There needs to be a phased transition in the North sea, but will the Secretary of State now clarify the Government’s position on fracking? Will he confirm that the moratorium that was put in place will remain in place—no ifs, no buts—as fracking would not make any difference to the prices consumers pay, is dangerous and would take decades to come on stream? [Hon. Members: “No!”] They do not agree with me. I have a position against fracking; they support fracking. We would love to know what the Secretary of State and the Government think and I am sure they would, too.

Let me ask the Secretary of State about the cost of living crisis facing families, arising from what is happening to oil and gas prices. We have consistently warned the Government that their measures were wholly inadequate to address the rise in energy bills. Will he undertake to tell the Chancellor that, in his spring statement, he must come back with much more help for both families and businesses?

We are united in our support for the people of Ukraine. We will support the Government in everything they do that can cut off support for the evil and barbaric Putin regime, and we urge the Government to learn the right lessons for our country from this crisis, so we can achieve both energy security and energy sovereignty.

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

In his customary way, the right hon. Gentleman raised a large number of questions, the majority of which I hope to deal with. He spoke against Putin’s barbaric invasion and completely illegal actions. I am very pleased that he reflects our sentiments and that we have a mutual interest in making sure that Putin fails.

As far as the cost of living is concerned, the Chancellor of the Exchequer has made an extensive intervention, and it is wrong for Opposition politicians to say that the price cap that will be set in August will necessarily be higher than it is today. We simply do not know. As the right hon. Gentleman understands, the price cap will be set retrospectively, looking at the average price. It may well be higher, but there are circumstances in which it will not increase as much as he imagines. As is always the case, we take an ongoing approach to looking at the price cap. We speak to Ofgem all the time and Ofgem is engaged in work on how the price cap is calculated.

I am pleased to hear that the right hon. Gentleman is keen to support investment in the North sea, making sure that gas is a key transition fuel, something that many people on the Opposition Benches may disagree with. He is right to stress an increased focus on renewables and nuclear power—we are absolutely at one in our agreement on that.

Photo of Robert Jenrick Robert Jenrick Conservative, Newark

I welcome my right hon. Friend’s statement. We have to brace ourselves for the greatest impact on living standards that any of us has known in our lifetime, which necessitates a more pragmatic approach to energy policy. It means accelerating investment in renewables, potentially lifting the effective moratorium on onshore wind, looking again at fracking and taking all possible advantage of our domestic supplies in the North sea as part of a transition. Does my right hon. Friend agree with that, and also that it would be perverse and dangerous to take away oil from Russia and replace it with oil and gas from Iran and Venezuela, two regimes that are just as malign and dangerous as Putin’s in Russia?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

My right hon. Friend is absolutely right: we have to look at all the possible technologies that can give us as much resilience as possible. We have to shrug off a lot of outdated dogma in this area, and I am pleased that Edward Miliband is full square behind nuclear, because as I remember, when he was Secretary of State, he was not the most supportive of the nuclear industry. My right hon. Friend is right to identify potentially hostile powers and we are keen to diversify away from providing resources to those powers.

Photo of Stephen Flynn Stephen Flynn Shadow SNP Spokesperson (Business, Energy and Industrial Strategy)

I think it is safe to say that we in this Chamber all broadly support the statement that the Secretary of State has made and, while there will be arguments about the potential speed of the transition, we cannot escape the sheer scale of what has been announced today. This is a seismic shift in UK, US and indeed European energy policy. However, we also cannot be blind to the fact that there will be consequences and one of the potential consequences is retaliatory action from Putin himself. What consideration has the Secretary of State given to that matter?

On that point, if there were to be gas and oil shortages on the European continent, as a producer of oil and gas, would that not emphasise the importance of Scotland’s North sea oil and gas reserves? In terms of resources and Scotland’s resources in particular, the renewable resources that Scotland has are enormous: 25% of Europe’s entire offshore wind capacity sits off the coast of Scotland. I was a bit disappointed that the Secretary of State did not say more about renewables, so I would like to hear a little more from him about the additional support he intends to give to onshore and offshore wind, tidal, hydro pump storage, hydrogen and so on and so forth, and what the timescales for that progress will be.

Of course, the second big consequence will be for consumers. We cannot escape that fact: there will be inevitable price rises, irrespective of what the Secretary of State intimated about the price cap. Will he commit to using every single penny of additional resource that comes from the North sea oil and gas sector to insulate households from the looming cost of living crisis?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

I was very determined not to inject any kind of partisan tone into these proceedings, but it struck me as particularly bizarre to hear the hon. Gentleman defend our North sea transition deal and the considerable oil and gas assets in Scotland. I would be very interested to hear what his Green counterparts in the coalition north of the border thought of his remarks.

In relation to protecting consumers, the hon. Gentleman will know that we are fully committed to the price cap, and review it all the time to determine how effectively it can operate. Of course, we are 100% behind renewables. Regarding onshore wind, it is important to remind the House that we lifted the ban on the pot one auction last year, which has led to a huge boost for onshore wind.

Photo of Bernard Jenkin Bernard Jenkin Chair, Liaison Committee (Commons), Chair, Liaison Committee Sub-Committee on National Policy Statements, Chair, Liaison Committee Sub-Committee on National Policy Statements

I thank my right hon. Friend for his statement and very much welcome the overall emphasis on replacing fossil fuels with renewables in the longer term. However, does his Department understand the urgency of the present short-term situation for not just prices, but security of supply? The Government have announced support for households, but what about businesses? Businesses tend to buy on six-month contracts and his hope that the situation will rectify itself within a few months is, I am afraid, hopelessly naive. We are facing a crisis in energy bigger than the oil price shock of the 1970s and it is likely to have as big an impact, or a bigger impact, on our economy than that had on our economy then. Is his Department seriously engaged with this situation with the necessary urgency?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

We are absolutely engaged with that. As someone who is very interested in the 1970s, my hon. Friend will remember that the oil price quadrupled in three months. We are facing a difficult time. The Department is fully aware of the urgency of the problem, but he will appreciate that a lot of the investment that we needed to make simply was not made. We did not make enough commitment to nuclear—that was a historical mistake of previous Governments—but we are focusing on dealing with the problem in the here and now, and that is why my right hon. Friend the Prime Minister and I are coming up with a plan in the next few days to track—[Interruption.] I find it extraordinary that Edward Miliband, who was responsible for energy policy in the last Labour Government, is smirking from a sedentary position, when he comprehensively failed the nuclear sector, completely failed on energy supply and completely failed on energy resilience. We are still trying to clean up his mess. I say to my hon. Friend that we are working on these plans.

Photo of Darren Jones Darren Jones Chair, Business, Energy and Industrial Strategy Committee, Chair, Business, Energy and Industrial Strategy Committee

I thank the Secretary of State for advance sight of his statement. He will know that many local authorities, NHS trusts and other public bodies are locked into gas supply contracts with Gazprom. To get out of them, the Government need to bring forward legislation to amend the public procurement rules. Will he do so?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

The position in respect of Gazprom is that the UK company is separate from the parent but, should anything happen to Gazprom, just as with any other supplier of energy, we will take the appropriate steps.

Photo of Desmond Swayne Desmond Swayne Conservative, New Forest West

When we sanction Russia, we also sanction ourselves. We need to be clear with the British people, do we not, that this is a sacrifice we are expecting them to make, when the Ukrainians are making so much greater sacrifice.

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

My right hon. Friend is absolutely right. People in this country have an intuitive, heartfelt feeling for the people of Ukraine. People understand—I have seen it in my constituency at the weekend and I am sure he has seen it in his—and are willing to endure hardships in solidarity with the heroic efforts that the people of Ukraine are making. People understand that in this country, because we are a generous and giving country.

Photo of Caroline Lucas Caroline Lucas Green, Brighton, Pavilion

The Government are right to get off Russian oil and gas—I welcome that—but wrong to propose replacing it with new domestic production. Our dependence on fossil fuels is what got us into this energy crisis in the first place, and that is why many of us, including the International Energy Agency, are calling for no new licences. The real insanity is trying to get out of one crisis by plunging ourselves into another. More extraction from the North sea will keep our bills high and drive us past safe climate limits, and fracking will not help. Will the Secretary of State use this moment to launch an emergency green revolution? Will he get serious at last about energy efficiency, and will he wean the UK off not just Russian oil and gas, but all oil and gas now?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

On this question, I have to confess that the hon. Lady and I have completely different views. We are diametrically opposed. I agree with her on the net zero commitment, but this idea that we can simply switch the lights off, so to speak, on oil and gas is absurd. [Interruption.] It is completely absurd and we need to have investment in the North sea.

Photo of Caroline Lucas Caroline Lucas Green, Brighton, Pavilion

“No new licences” is what I said.

Photo of Alun Cairns Alun Cairns Conservative, Vale of Glamorgan

I commend my right hon. Friend’s statement and pay tribute to him and his predecessors for the diversification they have made to the supply, security and sources of the energy mix over recent years, despite the lack of investment in nuclear during the 2000s leading up to 2010. Does he agree that oil will remain a key source of energy for some time to come as we are transitioning? What consideration has he therefore given to bringing about influence on OPEC nations to produce more oil so that the global supply can be better managed?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

My right hon. Friend raises a particularly important point. We had a discussion at the IEA ministerial only last week where we all agreed as a collective to release our stock. That was an American initiative that we supported. Clearly, we need to work as an international community to ensure we can provide enough supply to dampen the increase in prices that we are seeing.

Photo of Mick Whitley Mick Whitley Labour, Birkenhead

I welcome the spirit of these plans, but I urge the Government to act even faster. Russian gas and oil constitutes just a tiny fraction of the UK’s energy mix and we must break this last lifeline to the Putin regime as soon as we can. I am also deeply concerned to hear Government Members call for a resumption of fracking, which would be a betrayal of the commitments we made to the world in Glasgow just five months ago. Will the Secretary of State today commit to ruling out further investment in fossil fuels and instead pledge his Department’s support for an ambitious new green deal and wide-ranging investments in renewables, including the Mersey tidal project, so that we can finally set ourselves on the path of true energy independence?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

As Energy Minister and now Secretary of State, I have been totally committed to increasing the supply and production of renewable power. We reopened the pot one auction for onshore wind. For the first time ever, we had a pot ringfenced for tidal stream technology. I have introduced an annual auction for offshore wind. I am completely with the hon. Member in being 100% behind renewables and the green revolution.

Photo of Andrew Bowie Andrew Bowie Conservative, West Aberdeenshire and Kincardine

I thank my right hon. Friend not only for his statement, but for his continued and unflinching support for the oil and gas industry that I am proud to represent much of in West Aberdeenshire and Kincardine. On that, despite the importance of energy security, which has been brought home to us all through the tragic scenes we are seeing on television right now, is it not absurd that the Scottish Government’s official position continues to be that we should have no new licences, no new exploration and no new drilling in the North sea?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

My answer to my hon. Friend is that he is absolutely right. It is the North sea transition deal—“transition” is the key word—not the North sea extinction deal, as Stephen Flynn and his Green friends north of the border are pursuing. We have a very different approach from Members on the Opposition Benches, and long may that continue.

Photo of Dave Doogan Dave Doogan Shadow SNP Spokesperson (Defence Procurement)

“Transition” is the key word, as the Minister has just said. We need to pivot very quickly towards renewable energy, but this is a sharp reduction in oil and gas imports, as 8% come from Russia. We welcome that measure, but insofar as that will lead to a net reduction in the availability of oil and gas, it will also lead to a net reduction in emissions, which will not be maintained. We will need to supplement that demand in the short term. What discussions does he plan to have with the Scottish Government to ensure that we can meet that need with the maximum economic benefit to oil and gas services companies?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

I am happy to speak to colleagues in the Scottish Government about these issues. The hon. Member should remember that while we are banning the import, it is a phasing out. We could have gone down the US route and had a 45-day grace period, but that would have been too disruptive to the supply chain. I would be happy to talk to him and his Scottish Government colleagues about how we can manage the process, and that is exactly why in the statement I also announced the formation of a taskforce to deal with that transition.

Photo of Richard Fuller Richard Fuller Conservative, North East Bedfordshire

In regard to the UK’s Russian oil ban, I am convinced of the moral case, although I am sceptical about the efficacy of such a ban in the long term. I welcome my right hon. Friend’s commitment to keeping all options open, but he will be aware that moving faster on the transition to green puts greater costs on households from technology risk. Will he therefore look again at options on insulating homes and Government support for home insulation as part of the package?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

My hon. Friend, like other Members across the House, is right to focus on energy efficiency, because that is clearly a big part of this conundrum. We have had some successes, but we have also done some things not as effectively as we could have done. There were elements of the green homes grant that worked, and elements that did not work as well. I am constantly trying to improve the offer on energy efficiency with the public sector.

Photo of Kerry McCarthy Kerry McCarthy Labour, Bristol East

The Minister has been asked twice now specifically about fracking and has completely avoided answering the question. Would he like to have another go?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

I will have a go, and I will be very clear. Funnily enough, I was a Minister at the time when the written ministerial statement on hydraulic fracturing was made. The Government have always been clear that we will take a precautionary approach and support shale gas exploration if it can be done in a safe and sustainable way. That remains our position, and we will be evidence-led. That is what we wrote and said in 2019, and we are still committed to that.

Photo of Robert Halfon Robert Halfon Chair, Education Committee, Chair, Education Committee

I thank my right hon. Friend for his statement. On oil prices, he will know that prices at the pumps are reaching £1.60 a litre. Hard-pressed motorists are paying over £16 more than a year ago and hauliers are paying more than £120 every time they fill up at the pumps, which is literally unaffordable for most people around the country. I recognise that the Government have done a lot with the fuel duty freeze, but the Irish Government have today announced a rebate of 20 cents on petrol and 15 cents on diesel. We must do the same. He must make the case to the Treasury, so he should not just fob me off. Will he introduce PumpWatch, as recommended by FairFuelUK, which would monitor prices from the big oil companies to ensure that motorists are not ripped off at the pumps when the petrol pump price rockets as the oil price goes high but goes down like a feather when the oil price lowers?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

No right hon. or hon. Member has done more for motorists over the last 12 years than my right hon. Friend. I completely hear his imploring the Treasury to help consumers. My right hon. Friend the Chancellor provided a wide range of measures that offer some support, but we are always happy to talk to him to see how we can improve the offer.

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury), Shadow DUP Spokesperson (Work and Pensions), Shadow DUP Spokesperson (Brexit)

It is a great pity that it has taken a war in Europe to show how mad our energy policy is. Nevertheless, I welcome the Secretary of State saying that turning off domestic production of North sea oil and gas would be completely insane right now. Does he agree that it would be equally insane to turn our back on the shale gas that is available in the north of England, which would help to make us less dependent on foreign resources, create jobs, give us security of supply and give the Treasury revenue from gas? Does he agree that the Prime Minister’s decision not to concrete over the wells that are already there is the first step to the exploitation of that gas?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

In conversation with the Prime Minister, we were clear that it did not necessarily make any sense to concrete over the wells. We are still in conversation about that. As I said, our position on the moratorium has always been the same: if fracking can be done in a safe and sustainable way, the Government are open to the idea. We have always said that; the position has not changed. With respect to the North sea, I fully agree with everything that the right hon. Gentleman said.

Photo of Selaine Saxby Selaine Saxby Conservative, North Devon

I thank my right hon. Friend for his statement and for the work done by Conservative Governments to increase our renewable energy capacity by 500%. As we move towards the new normal of a greener and more secure energy supply, will he commit to increase the capacity coming out of the Celtic sea and accelerate the roll-out of floating offshore wind and the target that it can deliver on?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

As my hon. Friend remarked, floating offshore wind is key to accelerating our renewables offer. In the next few days, we will hopefully be setting some slightly more ambitious targets for our 2030 ambition than we have hitherto set.

Photo of Ben Bradshaw Ben Bradshaw Labour, Exeter

Given that the Conservatives have been in power for 12 years, why has the Secretary of State not already lifted the damaging moratorium put in by David Cameron on onshore wind—the cheapest and quickest way of generating renewables?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

I am sure that the hon. Gentleman will remember that there was a moratorium on the pot one auction, which we lifted two years ago. I am pleased to say that in the fourth auction round, we have a separate pot that is ringfenced for onshore and solar technologies. Onshore will be fully reflected in that auction.

Photo of Andrew Murrison Andrew Murrison Conservative, South West Wiltshire

The Government are right to be cautious about windfall taxes, but it is worth Conservative Members remembering that it was Baroness Thatcher who introduced them in 1981. Given the extraordinary profits particularly of BP and Shell in recent times, and given the very real prospect of simply unaffordable bills landing on our constituents’ doormats in the near future, will the Government at least keep that option open?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

My right hon. Friend is well versed in departmental responsibilities and he will know that issues to do with taxation are squarely within the remit of the Chancellor of the Exchequer. I personally feel that a windfall tax is not the way to go in this moment, because there is huge uncertainty about investment in the North sea as it is. If we were to entertain the idea of a windfall tax, that would simply frighten the investment, destroy jobs and destroy wealth creation. I do not think that is in anyone’s interest.

Photo of Liz Saville-Roberts Liz Saville-Roberts Shadow PC Spokesperson (Home Affairs), Shadow PC Spokesperson (Women and Equalities) , Plaid Cymru Westminster Leader, Shadow PC Spokesperson (Justice), Shadow PC Spokesperson (Business, Energy and Industrial Strategy), Shadow PC Spokesperson (Transport), Shadow PC Spokesperson (Attorney General)

Putin’s bloody war in Ukraine is being financed by Europe’s addiction to fossil fuels, so we have to speed up our green transition, but more than one in 10 Welsh households are living in fuel poverty and the number is growing daily. Starved of public transport investment, Wales is the most car-dependent nation in the UK, so we will be disproportionately affected by rising prices. Rural regions of Scotland and England with high levels of car dependency are eligible for the rural fuel duty relief. Will the Secretary of State extend that to Wales?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

Even if I wanted to, that is not in my power, but I would be very happy to talk to people across Government to address the issue that the right hon. Lady has raised.

Photo of John Lamont John Lamont Conservative, Berwickshire, Roxburgh and Selkirk

I welcome the Government’s statement today and their plans. Are they aware, however, of current supply issues for red and white diesel? Businesses in the Scottish Borders have contacted me in the last day or so to say that there are real issues in sourcing red and white diesel. Indeed, suppliers are reporting that Grangemouth will run out in the coming days. Are the Government aware of that, and will they investigate it further?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

I pay tribute to my hon. Friend, who consistently and ably defends his constituents’ interests. The red diesel phase-out was announced two years ago, and I would be happy to talk to him to see how we can manage that transition.

Photo of Mike Kane Mike Kane Shadow Minister (Transport)

To follow on from the question of Sir Bernard Jenkin, many businesses, such as aviation, which has a massive impact on my constituency, hedge their future fuel costs, but many will be hugely exposed because they have not hedged those costs. Is the Department doing some analysis of the exposure of such businesses?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

The hon. Gentleman raises a critical point. The Department is always looking, particularly at a time of extreme price volatility, at how prices affect the supply chain and businesses. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend Lee Rowley, was speaking to energy intensive industries this morning, as I was, and we are fully alive to their plight.

Photo of Lee Anderson Lee Anderson Conservative, Ashfield

We all welcome the banning of Russian oil and gas to put the squeeze on Putin, but what about Russian coal? We currently import more than 500,000 tonnes a year of coking coal, which is the same type of coal—metallurgical coal—that can be mined safely and cheaply in this country. Does my right hon. Friend agree that if we can get it out of the ground cheaply and safely, we should do that without delay?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

My hon. Friend will know that the specific issue relating to the Cumbrian coking mine is under judicial review but, as I said in my statement, we clearly want to move away from Russian hydrocarbons. That is absolutely our intention.

Photo of Wera Hobhouse Wera Hobhouse Liberal Democrat Spokesperson (Justice), Liberal Democrat Shadow Leader of the House of Commons, Liberal Democrat Spokesperson (Women and Equalities)

Obviously, the crisis makes us all aware of consumer energy prices and how to contain them to some degree. To reduce the average energy cost for consumers, we need a replacement for the green homes grant that is far more comprehensive and that recognises that solar power, battery storage and smart metering must be part of the solution. What are the Government’s plans to roll out residential solar much more ambitiously, which, together with battery storage and smart metering, could save the average consumer up to £900 annually on their energy bill?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

The hon. Lady will appreciate that we have done quite a lot to drive solar. I referred to the fact that we have restarted the pot one auction, which is all about onshore wind and solar. When we announce the result, there will be lots of solar projects that will hugely increase solar capacity in this country.

Photo of Bim Afolami Bim Afolami Conservative, Hitchin and Harpenden

The Secretary of State knows that I am a strong supporter of his policy to end reliance on Russian oil and of the need to intensify our investment in renewable energy. There are many rural communities in constituencies such as my own and, I suspect, across the country that rely on heating oil. What plans does he feel his oil taskforce will make for securing the availability of heating oil, ensuring the price of heating oil does not rise out of ordinary people’s reach and intensifying energy efficiency for homes, particularly for the older buildings that we find in many rural communities in areas such as my own?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

The taskforce will do exactly what my hon. Friend has asked for. It will look at where we can source supply at the cheapest rate and how we can increase our independence. It will look at taking away our reliance on Russia and at sourcing oil at the cheapest rate. There is an issue about further interventions for heating oil, and we are in discussions with the Treasury and others across Government all the time about how we can lessen the burden on our people.

Photo of Geraint Davies Geraint Davies Labour, Swansea West

The Secretary of State will know that his Department refused support for the Swansea bay tidal lagoon, but the new Blue Eden lagoon project is nevertheless going ahead. Instead of looking again at fracking, which generates 5% of fugitive emissions—that makes it worse than coal for climate change—will he look at supporting the Welsh Government and Wales overall in marine technologies and renewable technologies, alongside looking at organic batteries at scale, which can store such renewables without causing pollution?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

The hon. Gentleman makes a very fair point. We have done a huge amount as a Government in driving renewables. I was very pleased to see that the tidal stream auction has been ringfenced. On the specific Swansea lagoon project, I, as the Energy Minister at the time, and the Secretary of State felt that it was not economic, but generally I do not think any Government have done more for marine renewables and marine energy.

Photo of Mark Jenkinson Mark Jenkinson Conservative, Workington

I welcome my right hon. Friend’s swift and decisive action on phasing out Russian imports. To echo the comments of my hon. Friend Lee Anderson, as our minds are now focused on increased domestic production, such as that from the North sea, does the Secretary of State agree with me that the benefits of domestic supply chain resilience and security should also encompass other critical minerals, such as coking coal, of which we looked to Russia for over 750,000 tonnes—50% of our requirement—last year?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

My hon. Friend will appreciate that there is a diversity of sources for coking coal; we are not just looking to Russia. He makes an excellent point about critical minerals, and he will appreciate that this is the first Government ever to have a critical minerals strategy. It will be published in the next few weeks, and the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend Lee Rowley is leading on that within the Department.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Energy and Climate Change)

Electricity from gas power stations is one of the ways that we meet peak electricity demand. The Secretary of State knows that dispatchable energy can also be created from pumped-storage hydro, which is a completely renewable source. To minimise our reliance on gas and our switch to renewables, he knows that SSE is ready to go ahead and build Coire Glas in the highlands. Will he commit to agreeing a minimum floor price with the SSE, so that it can get on and build, and will he confirm the timescale for such an agreement?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

I am really delighted that the hon. Member raises this. I think he has raised it at every BEIS questions for the past 18 months, and I will keep saying what I have said before. We are interested in the technology, but I need to look at the specific proposals he is suggesting, and we obviously need to work out whether it is value for money. Those are the parameters we always look at.

Photo of Alexander Stafford Alexander Stafford Conservative, Rother Valley

Yesterday at the Business, Energy and Industrial Strategy Committee, we had a panel of experts talking about this very issue, and when the issue of fracking was raised, they were unanimous in their voice that it would be neither effective nor cost-efficient, would not do anything for the price and was actually a bit of a red herring. Does my right hon. Friend agree with me that fracking is a red herring, and that we should instead focus for energy on more renewables and even more from the North sea, because fracking just does not work in this country?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

I think we can look at a range of technologies. We looked at the fracking issue—I was the Energy Minister at the time—and there were issues regarding the seismicity of various projects. However, we have always had an open mind, and we have always said, and I will repeat it, that we will support shale gas exploration if it can be done in a safe and sustainable way. We will be led by the science on whether this is indeed possible, so there are lots of experiments and empirical evidence that we need to consider.

Photo of Jonathan Edwards Jonathan Edwards Independent, Carmarthen East and Dinefwr

The Secretary of State mentioned in his statement the need to protect the Ukrainian people from further misery. As he knows, Ukraine is a country with historical debt problems, and the full-scale Russian invasion we are witnessing will inevitably make matters worse for them. Considering this is likely to be a prolonged crisis, can he assure the House that the British Government will be leading international efforts with the IMF, the World Bank and the G7 to offer Ukraine debt relief?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

The issues about Ukrainian debt relief are for a much wider set of participants than are reflected in this House. We will do everything we can to support the Ukrainian people, and we are looking at every possible intervention that can in some way lessen the burden of this ferocious assault.

Photo of Richard Holden Richard Holden Conservative, North West Durham

I thank the Secretary of State for his statement. The sanctions today are an excellent next step in what we are doing to clamp down on Russia’s ability to fund its war machine, but my constituents have two questions. First, how can they best support the Government’s actions with direct contributions themselves? Secondly, in their own interests as well, what is the UK going to do to boost our domestic oil, gas and coking coal supply to ensure not only that jobs are created here in the UK, but that we reduce our dependence on other international players at this point?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

My hon. Friend is absolutely right. The issues of critical minerals and of security of supply could not be more important, and that is why I have commissioned a critical minerals strategy. On the help his constituents have offered and their full support, there are lots of ways in which we can contribute financially and materially. I helped organise such an effort in my constituency only last week, led by my excellent party chairman, Mike Brennan, but there are lots of ways we can help. On security of supply, that is absolutely, as the Prime Minister has said, our most important consideration right now.

Photo of Margaret Ferrier Margaret Ferrier Independent, Rutherglen and Hamilton West

Banning Russian oil will come at a cost every day for people across the UK, and it is a price I am sure they accept the necessity of due to this war by Putin on Ukraine. However, with an already growing cost of living crisis and soaring energy bills, what discussions has the Secretary of State had with the Chancellor about financially supporting green, clean and low-cost energy provision, so that it can be accessed faster and more broadly?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

My right hon. Friend the Chancellor and I, and our Departments, speak all the time about these issues. The hon. Member will appreciate that there is a spring statement, but at the beginning of February my right hon. Friend announced an extensive £9 billion of projects. We will be looking across the year at how this market develops, but fiscal interventions, as she will appreciate, are a matter for my right hon. Friend.

Photo of Ben Spencer Ben Spencer Conservative, Runnymede and Weybridge

I very much welcome my right hon. Friend’s announcement today. It cannot be right that we are bankrolling the Russian state and war machine through buying Russian oil and gas, and I am glad that we are moving to fix this at pace. He will know that we import quite a lot of aviation fuel from Russia, and his Department has done fantastic work in developing sustainable aviation fuel and its manufacture in the UK. Will he use this as an opportunity to drive that forward at even greater pace to set up SAF manufacture in the UK?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

My hon. Friend raises a really important point. With the dismal prospect of the ferocious aggression and violence that we are seeing, one of the things we are thinking about is a more sustainable future. A very thin silver lining on a very dark cloud is the fact that we are talking about resilience and sustainability, and I am absolutely delighted to be working with my hon. Friend and with right hon. and hon. Friends in the Department for Transport to make sure that we accelerate the adoption of sustainable aviation fuel.

Photo of Rachael Maskell Rachael Maskell Shadow Minister (Digital, Culture, Media and Sport)

The pace at which we divest from Putin’s fossil fuels is important for stopping this war. As a result, as in wars past, if we scaled up our manufacturing to see retrofitting and our renewables industry, that could be not only the saviour of the Ukrainian people, but the saviour of our planet. Will the Secretary of State not only scale up, but lead an alliance of countries that need to make such urgent diversification to ensure that we apply this pain to Putin’s regime as quickly as possible?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

The hon. Lady is absolutely right. We must work internationally across countries and come up with an alliance that can confront Putin in that way. That is why we are having an extraordinary meeting of G7 Energy Ministers tomorrow. However, it is relatively easier for us and American colleagues to shut ourselves off from that dependency than it is for colleagues in Europe, who are far more dependent on Russian gas and hydrocarbons.

Photo of James Davies James Davies Conservative, Vale of Clwyd

I welcome my right hon. Friend’s statement about a ban on Russian oil imports. Does he agree that the increasing need for self-reliance on energy sources means that it is right that we invest in renewable energy schemes in this country, including the possibility of a large tidal range facility in north Wales?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

I hear the clamour for a tidal range facility in the Vale of Clwyd, and I am sympathetic towards it. My hon. Friend will, I am sure, be good enough to acknowledge that for the first time ever in the fourth auction round we have a tidal stream auction pot. We are committed to doing all we can to further the development of marine renewable energy.

Photo of Deidre Brock Deidre Brock Shadow SNP Spokesperson (Wales), Shadow SNP Spokesperson (Environment, Food and Rural Affairs)

The Secretary of State said that he was 100% behind renewables and he has mentioned the tidal stream pot, but I would like him to offer so much more support for tidal energy schemes, in which Scotland can play such an important role. It is a such a cleaner, greener and cheaper alternative to nuclear.

Photo of Kwasi Kwarteng Kwasi Kwarteng The Secretary of State for Business, Energy and Industrial Strategy

I recognise the hon. Lady’s commitment to tidal stream, and she will be good enough to notice that this is the first time that any British Government have committed to supporting any marine energy renewable project. There is always the clamour for more. We should do more, and we could do things more quickly, and I am happy to work with her and other Members across the House to see how best we can do that.