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Rising Energy Costs: Impact on Industry and Businesses

Volume 703: debated on Wednesday 17 November 2021

7. What steps the Government have taken to tackle the impact of rising energy costs on industry and businesses in Wales. (904164)

The Government have provided £2 billion to help businesses with electricity costs and to protect jobs in recent years. We also have various schemes in place—including the £315 million industrial energy transformation fund—to support businesses with high energy use, including those in Wales, to cut their bills and reduce their carbon emissions.

Seventy per cent. of small and medium-sized enterprises believe that high energy costs will negatively affect the growth of their companies. We know that businesses will already be hammered by this Tory Government’s national insurance hike, so what are the Secretary of State for Wales and his ministerial colleagues doing to help support Welsh and other UK businesses to overcome their energy cost problems, to provide much- needed stability, to help them plan ahead, and to deliver the growth that our economy so badly needs?

I am sorry that we cannot persuade members of the Labour party to support a small increase in taxes to protect the national health service, but that is a matter to which we can return.

The UK Government recognise that, as we transition from energy sources such as coal and gas, there will be a cost challenge, which is why we have committed to minimising energy costs for businesses through, for example, the £470 million that has been given in relief to energy-intensive industries through a combination of compensation and exemption.

Will my hon. Friend ensure that the efforts that the Government are rightly making to decarbonise electricity generation do not unfairly disadvantage high energy industries, because if they do, we will be exporting carbon emissions, not reducing them?

My right hon. Friend is exactly right. The Government recognise that potential issue, which is why, for example, £470 million has been provided to high energy users through a combination of compensation and exemption. It is a very real problem to which she refers, and one that is recognised and being dealt with by the Government.

High energy costs act as a disincentive for investment from international steel and other manufacturing companies and other investors, with the UK seen as a less favourable investment environment than other countries. Other countries with less dramatic price rises are putting in prompt measures to proactively support their industries, so why are this Government so slow to act? Can the Minister outline what discussions he is having with colleagues across Government to follow similar interventions to support the steel and manufacturing industries in Wales?

My right hon. Friend the Secretary of State and I have had, and will continue to have, a range of discussions with colleagues in other ministerial Departments as to how we resolve this problem, but the hon. Gentleman will surely recognise that we are making a revolutionary transition from high carbon emitting sources, such as coal and gas, towards renewable energy, such as wind, solar, and possibly nuclear, and that they do come with costs. They are more expensive. Members across the House will recognise the need to make that transition. The Government are leading that transition, and we are also putting in place schemes to support those who may face challenges as a result.