Labour has called for support for families and businesses through an energy price freeze since August, setting out detailed costed plans, so we support the passage of the bill through the UK Parliament, even if it was described as a “landmark” two-year price guarantee but has now been shredded to a six-month freeze.
The devolved provisions that require Scottish Parliament consent are likely to be limited in practice and we welcome the efforts of the Scottish Government to seek assurances that the direction-giving powers will not be used to cut across devolved competences such as planning. We also recognise the time-limited nature of most of the powers in the bill.
Given the urgency of the matter and the dire cost of living crisis that we face, we share the Scottish Government’s view that seeking to carve out certain aspects of the support for separate provision from the Scottish Government is not appropriate or practical and therefore we support giving consent through the LCM.
These are urgent, desperate times for far too many families, who are having to choose between heating and eating, and far too many businesses and organisations that are left wondering whether they will soon have to switch off the lights for the final time. Although we support the help with energy costs that the bill enables, we still have concerns over substantial parts of the legislation and Labour members in the UK Parliament have been seeking to amend the bill.
There is a contrast between the UK Government’s proposals and what was proposed by Labour in August. Labour proposed a real freeze; the UK Government has allowed a rise, albeit one that is capped. There also remain concerns over off-grid households and, of course, we have a profound disagreement over how the support will be funded. It is no secret that Labour wants to see the package of support funded not by more Government borrowing—which ordinary families will ultimately have to pay back—and a limited windfall tax, but primarily through a substantial windfall tax on the excess profits of the big oil and gas firms and by closing loopholes in the support that is provided for fossil fuel companies.
The Energy (Oil and Gas) Profits Levy Act 2022 included a significant loophole for oil and gas companies that invest more in oil and gas exploration and production. According to the Treasury, the allowance will mean that businesses will receive a 91p tax saving for every £1 invested, nearly doubling the tax relief that is available to oil and gas companies and tilting the pitch in favour of fossil-fuel investment over renewable investment. Labour would like to see that loophole closed, which would bring more than £5 billion to the table, and we have been seeking to pursue that through amendments in the UK Parliament, while recognising the limited scope of the bill itself.
There is, of course, far more that the Scottish Government can do to support families, businesses and organisations at this time, including cancelling school-meals debt, increasing funding for money advice services and topping up the welfare fund. That will be the focus of Labour’s business in the chamber tomorrow.
The focus of the bill and the LCM highlights why we need to recognise the lessons of the energy crisis. Those lessons do not suggest that we need to drive forward with fracking, which was the plan of last week’s Prime Minister—I am not sure what the view is of this week’s Prime Minister. The lessons are that there is a need for a sprint for clean energy—solar, wind and nuclear—for energy efficiency and for a publicly owned energy fund, which the next Labour Government will deliver where others have failed to do so. There is also a need to de-link electricity and gas prices within a clear timetable so that we do not find ourselves facing the requirement for another piece of legislation in this area in the near future.
In the meantime, this bill is necessary, urgent and overdue; therefore, Labour is content to support the LCM.