Asked by
To ask Her Majesty’s Government what plans they have (1) to
withdraw Gazprom Energy’s licence to operate in the United
Kingdom, or (2) to place Gazprom Energy into special
administration.
The Parliamentary Under-Secretary of State, Department for
Business, Energy and Industrial Strategy () (Con)
My Lords, Gazprom Energy’s parent company has been sanctioned by
the UK Government in relation to transferable securities. Our
sanctions continue to put pressure on Russia to cease its war on
Ukraine. As regards the retail arm in GB, Ofgem and BEIS will
continue to work closely with all energy suppliers to ensure that
customer supply remains uninterrupted, and we have tried and
tested practices in place for situations where suppliers exit the
market.
(LD)
I thank the Minister for his Answer, but can he explain to the
House why it is that a subsidiary of Russian state-controlled
Gazprom is continuing to operate in the United Kingdom one month
after Russia’s brutal invasion of Ukraine, and when his own
colleague in government, the Health Secretary, has been calling
on NHS bodies to cancel contracts with the company, and local
authorities and businesses are doing the same? Is it not time for
the Government to stop dithering and take Gazprom Energy into
administration now?
(Con)
We keep these matters under constant review and the sanctions
regime is constantly evolving. The noble Lord will be aware that
the Foreign Secretary today sanctioned another 65 new bodies, and
we have now sanctioned over 1,000 individuals and businesses
since the invasion started.
(Lab)
Many local authorities, NHS trusts and other public bodies have
gas supply contracts with Gazprom Energy. What support is Her
Majesty’s Government giving to authorities and trusts that wish
to break their contracts with Gazprom, and what consideration has
the Government given to changing public procurement rules to
allow that?
(Con)
The noble Lord makes an important point. Gazprom Energy supplies
about 20% of the UK business market, as he correctly observes,
including many schools and hospitals, and so on. It would not be
right for the Government to interfere in individual contractual
decisions but for those that choose to break their contracts, the
Crown Commercial Service stands by to support them in securing
their next energy contract.
(LD)
My Lords, is the Minister aware of a recent paper by the Energy
and Climate Intelligence Unit which shows that our dependence on
Russian gas could be quickly and permanently eliminated, not by
more North Sea gas, which is expensive, not immediate, low impact
and temporary, but by reducing gas demand by returning to our
programme of insulating homes, installing heat pumps and
expanding renewables? Of course, that would also reduce household
bills, create jobs and provide us with energy security.
(Con)
The noble Baroness posits those as two alternatives but in fact
we are doing both. We will still need gas supplies during the
transition, but we are spending some £6.6 billion over this
Parliament on home insulation measures, and we have one of the
largest programmes of renewables in the western world and one of
the largest offshore wind sectors in the world. We are proposing
to expand that to approximately 40 gigawatts by the end of this
decade. None of this can happen quickly—it is a transition—but we
will still need gas during that transition. My point is that it
is better to get the gas that we will need during the transition
from UK sources rather than relying on unstable parts of the
world.
(GP)
My Lords, following on from the noble Baroness’s question, which
focused on domestic use of gas, I note that in August 2021, the
Swedish firm HYBRIT made the first delivery of steel produced
through green methods, without coal and without gas energy
supplies. I note that Sheffield Forgemasters, for example, is a
Gazprom client, and indeed, two-thirds of the energy supply for
the Energy Intensive Users Group comes from Gazprom. Should not
the Government be doing far more to help energy-intensive
industries get away from fossil fuels?
(Con)
We are—that is the answer to the noble Baroness’s question. We
have the Industrial Energy Transformation Fund, and we are
working with many of these difficult-to-decarbonise industries,
such as steel, which of course plays a vital role in many of our
deprived communities. We want to help them transition to clean
forms of production such as hydrogen, so we are. I add that, even
if gas is supplied by Gazprom UK, it is not Russian gas. Gazprom
buys gas on the wholesale gas markets here, as many other retail
suppliers do. We are dependent only by about 3% to 4% on gas
supplies from Russia.
(Con)
Can my noble friend assure the House that there will be no
prodigal distribution of permissions for onshore wind farms?
(Con)
I am not sure exactly what my noble friend means by that; there
are very tight planning constraints on onshore wind farms. I am
sure he will want to await any future announcements on energy
policy which may be coming in the near future. However, we opened
the contracts for difference round to onshore wind bids in the
last round.
(CB)
My Lords, is it possible not to be profligate but sensible about
onshore wind? At the moment we have a total moratorium on a
source of domestic cheap power that has been imposed by the very
strict planning restrictions. As the Minister is well aware—the
House may not be—my Private Member’s Bill, the Onshore Wind Bill,
would put this situation right and put applications for onshore
developments into the same regime of planning applications as
other renewables.
(Con)
I was glad to debate the noble Baroness’s Bill last week. We are
not ruling out onshore wind—it can make an important
contribution. There are local planning considerations that are
important to bear in mind. Many people object to fracking because
of the imposition on local communities, and in many respects the
same objections and arguments should apply to onshore wind as
well. We need to take the public with us on this and ensure that
there is public support for these turbines.
(Lab)
My Lords, between 24 February and 3 March, 28 new companies and
one new limited liability partnership were registered at
Companies House for which the person with significant control
claims to be a Russian national. What steps have the Government
taken to ensure that these companies are not used for
sanctions-busting, and will they take steps to put them into
compulsory winding up?
(Con)
I am not sure what point the noble Lord is trying to make here.
We are not pursuing a war on the Russian people; many Russian
individuals are just as opposed to this war as we are. We have a
constantly evolving round of sanctions—the Foreign Secretary
announced another 65 sanctioning proposals this morning—and some
1,000 individuals and businesses have been sanctioned. However,
we have to be careful to differentiate between Russian state
entities, those linked to Putin, and perfectly legitimate Russian
individuals.
(LD)
My Lords, the Government have said that Gazprom has been
sanctioned and will no longer be able to issue debt or equity in
the UK. Can the Minister say what that means? The British people
want to be sure that no money from Gazprom is going to the
Russian state to finance its vendetta against the Ukrainian
people. Can the Minister categorically state that that is
happening?
(Con)
As I said, it is difficult for me at this stage to comment on
individual cases. However, we keep the whole sanctioning regime
under constant review and new rounds of sanctions are constantly
announced. It is difficult in this case because of the large
numbers of essential businesses, schools, hospitals, et cetera
that have contracts with Gazprom UK, but we will keep these
matters under review.
(LD)
Can the Minister tell the House how he squares his earlier answer
that it is up to individuals, businesses and organisations to
make decisions about whether they cancel their contracts with
Gazprom with the instruction that his colleague the Health
Secretary has given to NHS England that it must withdraw from
contracts? With various organisations withdrawing from these
contracts—local authorities, health authorities and businesses—is
it not almost inevitable that Gazprom will collapse? Would it not
make much more sense for the Government to get ahead of this and
take Gazprom into special administration now?
(Con)
Ofgem has a number of processes in place to deal with supplier
collapses and we stand ready to put those into effect if they are
required. However, these are individual commercial decisions.
Local authorities, for instance, are individual legal entities
and they have to take their own commercial contractual decisions,
but we will support them as much as we possibly can in that
process.
