£8.3 billion GB Energy plan will shield consumers from shocks, Miliband says

Labour’s flagship GB Energy company will shield consumers from international market shocks, Ed Miliband has insisted, despite fears the Bill to create it has “barely anything in it”.

Debating the Great British Energy Bill at its second reading, the Energy Security Secretary took questions about the proposed publicly owned company, which the Government has said it will back with £8.3 billion over the course of this Parliament.

Mr Miliband told MPs: “The truth is that we had the worst cost-of-living crisis in a generation because of our exposure to fossil fuels. We have seen prices rise again on October 1, not because of decisions made by Government but because of our dependence on international gas markets.

“The argument for clean energy that we used to debate 15 years ago was a climate argument. It is now as much an energy security argument as a climate argument.”

Ofgem, the energy watchdog, announced over the summer it would hike its price cap by 10% from the current £1,568 for a typical household in England, Scotland and Wales to £1,717 from October, and confirmed rising prices in the international energy market, due to heightened political tensions and extreme weather events, were the main drivers behind the decision.

Democratic Unionist Party MP Jim Shannon (Strangford) had asked Mr Miliband: “What will the price of energy be at the end of it?”

The Cabinet minister replied: “This is a massive concern for all of our constituents, and Great British Energy is a crucial tool to bring down prices for our constituents.

“And here is the truth, and in a way, every person in this House, every member in this House, has to take a judgment about this – do they believe that business as usual, staying on fossil fuels, is going to give us the energy security we need?”

Conservative shadow energy security secretary Claire Coutinho said she feared MPs could sign off on “£8 billion of taxpayers’ money for a completely blank cheque, for an energy company that won’t cut your bills or turn a profit by 2030”.

She said: “This Bill is four pages long. There’s barely anything in it.

“I don’t want to oppose this Bill just for opposition’s sake but he’s provided no detail on how this Bill could deliver any of his promises, let alone all of them.

“This is a four-page Bill in which the Secretary of State is asking for £8 billion of taxpayers’ money while setting out no investment plan, no figures for the energy that will be produced, no numbers for the energy bill savings or carbon emission reductions, not even a timeline.”

The Conservative frontbencher also claimed the “energy sector is not short of state-run bodies” including Ofgem; the National Energy Systems Operator, which helps plan British energy and gas networks; the Climate Change Committee; Great British Nuclear and the UK Infrastructure Bank, which the previous government set up to finance projects which help the UK’s transition to net zero.

Ms Coutinho said: “So why do basically the same thing again? Well, there are a few important omissions and tweaks. Firstly, while the Infrastructure Bank sets out directions for governance by directors and non-executive directors, this Bill does no such thing.

“While the Infrastructure Bank appoints an independent person to carry out a review of the effectiveness of the Bank in delivering its objectives, this Bill does no such thing.”

Harriet Cross, who represents Gordon and Buchan to the north of Aberdeen, pressed the Government on when it will announce where GB Energy will be headquartered, and she described “layers of uncertainty which are currently driving away investment and making a less secure job environment in north-east Scotland”.

The Conservative MP added: “It’s so critical that we manage the energy transition properly so the north-east of Scotland does not become the next region that suffers industrial decline in the same way as the miners.”

Mr Miliband had earlier said: “Now, it is true British waters are home to one of the largest floating offshore windfarms in the world, Kincardine, just 15 kilometres off the coast of Aberdeen – and (Ms Coutinho) nods – but where was it made?

“Its foundations were made in Spain, its turbines installed in The Netherlands, and then it was simply towed into British waters. Now, how can that be right?

“This Government is not neutral about where things are made. We want a future made in Britain.”

If MPs and peers pass the Great British Energy Bill, they will give Mr Miliband the power to set up the firm.

The Bill cleared its first Commons hurdle on Thursday after MPs gave it a second reading by 348 to 95, majority 253.

It will undergo further scrutiny at a later date.