I would like to speak briefly to new clause 36, tabled in my name. New clause 36 asks—no, implores—this House to consider a national energy guarantee, which is also known as a rising block tariff combined with a social tariff. It is a system of energy pricing that shows that social and environmental goals can be advanced together. It really does embody a green new deal in action.
There are some in this House who claim that tackling the cost of living crisis and the climate crisis is a zero-sum game; that we can only do one or the other. The amendment blows a hole right through that falsehood. The reality of the current system in use by the Government is that too many people—millions of them and growing—are falling into fuel poverty. It is a system that simply is not fit for purpose. Let us be clear. Higher energy prices are not a blip. They are here to stay. Research from Cornwall Insight shows that energy prices will remain
“significantly above the five year pre-2021 historic average”
until at least the end of the decade. Even though Ofgem’s price cap will come down in October, the average bill will still be nearly double what it was in 2021, before prices soared. Millions of households will pay more this winter, given the Government’s energy assistance schemes have ended for most.
Up and down the UK, energy debt is soaring. Citizens Advice reports that nearly 8 million people borrowed to pay their bills in the first six months of this year. A quarter of people say that their energy bill is the cost they are most worried about. In my own city of Norwich, the rate of reporting fuel debts has increased by a staggering 300%. Yet by subsidising the unit price, the Government’s energy price guarantee disproportionately benefited well-off households and did nothing to incentivise energy demand reduction and decarbonisation.
The national energy guarantee will ensure that everyone can afford the essential energy they need, while cutting carbon. Here is how it works. Everyone gets a free energy allowance that covers 50% of essential needs. Households with higher needs, such as those with children or disabled residents, would get a larger allowance. The next 50% of energy used is charged at a reduced rate, matched to 2021 prices. Beyond that, a carbon-busting premium tariff kicks in. The result is that around 80% of us will have lower bills, while wealthier high-energy users will pay more but can reduce their bills by installing energy-saving measures such as insulation.
In one fell swoop, we will have protected essential energy needs, reduced bills and incentivised a ramping up of decarbonisation of our housing sector—crucial if we are to meet our net zero commitments. I urge and implore the House to support new clause 36.