Oral Answers to Questions
Debate between Lord Barker of Battle and Caroline Lucas(10 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
Caroline Lucas (Brighton, Pavilion) (Green)
4. What recent assessment he has made of the contribution of energy efficiency to reducing energy costs.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
Since 2010, more than 4.8 million insulation measures have been installed through Government schemes. For the average home, installing such measures can typically save between £25 and £270 on an annual energy bill.
Caroline Lucas
This week, we have heard that excess winter deaths are up 29% on last year, with up to 31,000 excess winter deaths. That should be a national scandal. Why, in that context, have the Government abolished the duty to eliminate fuel poverty, why will he not agree to amend the Energy Bill to include mandatory minimum energy efficiency standards for the homes of low-income households, and will they reverse their opposition to a binding EU 2030 energy efficiency target?
Gregory Barker
I share the hon. Lady’s concerns about the winter deaths, but one has to say, being very objective about it, that there was a clear link between influenza and those deaths in the last period looked at.
We cannot be complacent about the impact of cold homes. That is why we have a national energy efficiency strategy—we are the first Government ever to have such a strategy—and why we have an ambitious public and market-based programme to roll out energy efficiency across the housing stock.
Energy Prices and Profits
Debate between Lord Barker of Battle and Caroline Lucas(11 years, 2 months ago)
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The Minister of State, Department of Energy and Climate Change (Gregory Barker)
This has been an interesting and timely debate. As we head into the autumn, I know that colleagues across the Chamber share their constituents’ worries about the rising cost of living and the strain that energy costs in particular can put on tight family budgets. That is why the coalition is determined to do everything it can to help hard-working families with their energy bills.
Sitting here this afternoon listening to the Opposition Front Benchers, I could not help but recall the words of Marshal Talleyrand 200 years ago. When the ancien régime was briefly restored to the French throne after the defeat of Napoleon, Talleyrand famously said of the old, backward-looking, clapped out Bourbon royal family, “They learned nothing, and they have forgotten nothing.” Put another way, the old regime singularly failed to understand why they had been deposed by the people in the first place, or to learn from any of their previous mistakes.
Is that not just old Labour all over? Labour, which saw heating bills more than double during its time in government. Labour, which in 13 years of government allowed real competition in the market to shrivel. Labour, which in 1997 inherited a diverse range of 14 competing companies and turned them into the big six. Labour, which drove British energy into the ground and failed to build a single nuclear power station. Its record on renewables was little better. After 13 years in office, Labour left Britain third from the bottom of the European league table for deployed renewable energy. It was Labour that allowed the cost of its green energy programmes to spiral out of control but failed to take real steps to decarbonise the sector; Labour that, after 13 years in power, left office with nearly 5 million vulnerable people living in fuel poverty; and Labour that, in the last Parliament, saw fuel poverty rise in every single year of the now Leader of the Opposition’s tenure as Energy Secretary.
So what is the big idea that Labour has brought forward to the debate to help hard-pressed consumers? It has three ideas—hardly an energy revolution, but let me remind the House what they are. The first is to abolish the regulator that Labour created in 2000 and replace it with—yes, you’ve guessed it—another quango. It also wants to bring back the electricity pool, the same pool that it abolished back in 2001, and put all over-75s on the cheapest tariff—hardly a groundbreaking idea when we are already acting to do that, but for all consumers, not just the oldest 8%, so that all our constituents can benefit from a better deal.
I will not pretend to the House that there are easy answers, simple solutions or quick fixes to driving down fuel poverty, driving up competition in the sector or delivering a better, fairer deal for hard-pressed consumers. However, unlike the Labour Government’s drift, inertia and failure to deliver, the coalition has rolled up its sleeves and is making a real difference.
I want to spell out some of the bold, practical measures that the coalition is taking to help hard-working families, but before I do that I will address some of the important points that colleagues have made. We have heard from the hon. Members for Edinburgh North and Leith (Mark Lazarowicz) and for Strangford (Jim Shannon), my hon. Friend the Member for Daventry (Chris Heaton-Harris), the hon. Member for Angus (Mr Weir), my hon. Friend the Member for Sherwood (Mr Spencer), the hon. Member for Ynys Môn (Albert Owen), my hon. Friend the Member for Tamworth (Christopher Pincher), the hon. Members for East Antrim (Sammy Wilson) and for Glasgow North West (John Robertson), my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) and the hon. Member for Edinburgh East (Sheila Gilmore).
It was striking that not a single Labour Member spoke in favour of the Opposition’s proposal to abolish Ofgem, but two clearly disagreed with it. It was notable that my hon. Friend the Member for Sherwood made a thoughtful and constructive speech, and he was right to address both the causes of, and possible solutions to, our energy challenges. The hon. Member for Angus was also thoughtful, and I assure him that our simplification of tariffs is already having an impact. I also take on board his important points about prepaid meters.
I wholeheartedly agree with my hon. Friend the Member for Daventry about the need for bill simplification. We get it, and we are on it, but our entire grid is crumbling and requires big investment, whatever energy source we put into it. This year, onshore wind added just £9 to consumer energy bills. The hon. Member for Ynys Môn, the second Labour Member to disagree with Labour Front Benchers about abolishing Ofgem, made sound points about off-grid customers. We are looking carefully at the Committee report to which he contributed. My hon. Friend the Member for Tamworth spoke with great authority and gave a balanced approach to the complex issues we face.
The coalition does not have a magic wand, and Labour’s legacy of debt, deficit and economic failure casts a long shadow over all Departments. Despite the imperative of dealing with Labour’s debts, we are taking action and setting a new radical and ambitious energy agenda. Unlike under the previous Government, there have been two energy Bills in three years. The green deal might be in its infancy—I listened to the hon. Member for Edinburgh East—but it is already building a new market in energy efficiency, and bringing far greater competition to the market and new choices for consumers.
Gregory Barker
The hon. Lady was not actually here for the debate. We are taking action to give more teeth to the regulator and compensate energy consumers who have been badly treated. We have embarked on radical market reform to unleash investment in modern clean energy, building our energy security that was so perilously ignored by Labour. We are also offering immediate help for our constituents. For example, Labour put the whole cost of the renewable heat incentive on to consumer bills. We have removed it, saving consumers £120 million a year collectively. Labour refused to cut solar feed-in tariffs, despite fixing them far too high. We took the tough decision to cut those tariffs. We were right, they were wrong. Solar deployment is up, costs are coming down, and the consumer is better off.
Energy Bill
Debate between Lord Barker of Battle and Caroline Lucas
Caroline Lucas
I apologise, I thought they were all wrapped up together in one happy family.
I am delighted that amendments 42 to 46 are supported by the hon. Member for Hove (Mike Weatherley), so in recognition of that I will call them the amendments from Brighton and Hove. They are basically about decentralised energy, which was another area where the Minister said that he appreciated the direction but did not feel that action was necessary. I quote from “Power to the People—the Decentralised Energy Revolution”, a document from the Prime Minister himself:
“In other countries low carbon energy sources have led a process of decentralisation—in the Netherlands, for instance, in little more than a decade, combined heat and power (CHP) became the single largest supplier of the country’s energy needs.
I want to see a similar revolution happen in Britain.”
I want that too, but I do not see it happening unless we put the means in place. It is a real shame that that vision has gone the same way as the abandoned huskies—once hugged, now hated. Distributed generation is about producing and using energy locally.
Gregory Barker
We have a long way to go, but since the coalition came to power, hundreds of thousands of homes and businesses have started generating their own electricity—and that is only the beginning.
Caroline Lucas
I am delighted to hear the Minister say that. All I want to do is build on that wonderful beginning and make it go even faster with even more ambition. That is why I so hoped that he would support the amendments that go in exactly that direction. Seriously, I know that the Minister is deeply committed to the issue; I simply think that we could get there faster and with a bit more ambition by having a clearer strategy and focus.
Decentralised energy is not even formally defined in Government policy. I would have thought that it would be simpler if it were; that is one of the issues that my amendments would address. Of course, decentralised energy is already used in hospitals, schools, small towns and so forth, but its untapped potential remains vast. I cannot help thinking that if Ministers spent a fraction of the time promoting decentralised renewables that they spend promoting the nuclear industry, we might have a different kind of energy system today.
The amendments would create a new feed-in tariff scheme for distributed generation, with a maximum capacity limit of 50 MW. I am glad that I now understand the amendment tabled by the hon. Member for Liverpool, Wavertree (Luciana Berger); I am delighted that the 10 MW was a bottom line rather than a top limit. The 50 MW was the level recommended by the Energy and Climate Change Committee and we should be more ambitious than the 5 MW that the Government currently foresee or the 10 MW ballpark figure from the official Opposition.
Finally, the amendments would require distribution network licence holders to play their part in facilitating decentralised energy. It is worth pointing out that a distributed generation feed-in tariff would involve no additional cost for consumers or the Treasury; it would simply provide an effective way for small generators to invest in electricity generation and participate in the market.
Again, the new clause is complementary to amendment 47 on a green power auction market and to Opposition amendment 1. I hope that the amendments can be taken together as a positive contribution to moving to decentralised energy in a swifter fashion.
Energy Generation
Debate between Lord Barker of Battle and Caroline Lucas(11 years, 7 months ago)
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The Minister of State, Department of Energy and Climate Change (Gregory Barker)
Having returned from St Paul’s, I may be feeling a little dewy-eyed and unduly romantic, but I think this was a really good debate on both sides of the Chamber. I do not agree with all the speeches and interventions, but the quality of the arguments deployed by both sides has been very high and I have listened carefully to the points made by the hon. Members for Brent North (Barry Gardiner), for Angus (Mr Weir), for Strangford (Jim Shannon), for Llanelli (Nia Griffith) and for Southampton, Test (Dr Whitehead) and by my hon. Friend the Member for Redcar (Ian Swales). I have also listened carefully to the powerful and pithy interventions by my hon. Friends the Members for North Warwickshire (Dan Byles), for Warrington South (David Mowat) and for Rochester and Strood (Mark Reckless).
Most of all, I congratulate my hon. Friend the Member for St Ives (Andrew George) on securing this debate and on opening with a tour d’horizon on the energy sector with a clear focus on decarbonisation. He is right in so many respects on the Government’s ambition and direction. In less than three years, we have put in place many of the key building blocks of a greener, cleaner energy economy of which both coalition partners can be rightly proud.
Year-on-year, offshore wind capacity was up 60% and solar PV capacity was up 500% in 2011-12. [Interruption.] The hon. Member for Brighton, Pavilion (Caroline Lucas) is chortling, but in the past six months we have added more than half a gigawatt of solar. That totally flies in the face of the Opposition’s doom-mongering and scaremongering. The Government have a record of deployment and real action of which we can be proud, but we are absolutely clear that we will always consider the interests of the consumer. We will always consider who is actually paying. We do not believe in going green at any price; we believe that there is a fair balance between value for money and achieving our vital climate goals.
Gregory Barker
I am afraid that I will not give way, because I have very little time to cover all the points.
It is interesting that I do not think that I have heard anyone in this debate refer to consumers, to consumer bills or to the ability of the British taxpayer to shoulder the subsidies that are necessary to pay for this agenda. As hon. Members know, I am a great champion of greening our economy. I am one of the few Members present who played a part in the passage of the Climate Change Act 2008, which is one of the proudest moments of my parliamentary life to date. I am absolutely committed to that, but we have to reconcile the difficult challenge of cost and delivery.
The Prime Minister has been emphatic. I am glad that my hon. Friend the Member for St Ives mentioned that we are the greenest Government ever. That was the Prime Minister’s pledge when he visited the Department of Energy and Climate Change on day four of the Government, and he reiterated the pledge only a matter of weeks ago to the Royal Society:
“we are in a global race and the countries that succeed in that race, the economies…that will prosper are those that are the greenest and the most energy-efficient… it is the countries that prioritise green energy that will secure the biggest share of jobs and growth.”
There is no fundamental difference between the two sides of the House in our direction, destination or determination to meet the goals that are embedded in the Climate Change Act. In fact, there is not so much between us on the decarbonisation target, either. We have tabled an amendment to the Energy Bill that will allow us to set a decarbonisation target alongside the fifth carbon budget, and I will go on to address that in detail.
My hon. Friend the Member for St Ives mentioned marine energy in his opening speech. I am extremely proud of the huge leaps forward we have made on that exciting technology over the past three years with the establishment of the UK’s first marine energy parks—first in the south-west and now in Scotland. I am extremely proud of that investment. Our commitment in the last review, despite all the pressure on public finance and energy bills, was to increase substantially the renewable obligations certificates that we are giving marine, to give it the investment punch that it needs.
My hon. Friend kindly invited me to visit Cornwall and see FaBTest. I will be there next week. I must admit that it was already in the pipeline, but he can take back the good news this weekend and tell every Cornishman good and true that the Energy Minister is coming.
Oral Answers to Questions
Debate between Lord Barker of Battle and Caroline Lucas(11 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
Gregory Barker
I pay tribute to my hon. Friend’s diligence in pursuing this issue, and to my hon. Friend the Member for Truro and Falmouth (Sarah Newton), because their efforts have really helped to promote this industry in their region. We are very keen to see progress in Cornwall, which we estimate has the best geology for deep geothermal power generation in the UK. I will be delighted to meet them both to see how we can advance this agenda.
Caroline Lucas (Brighton, Pavilion) (Green)
12. What recent advice he has received on the effects of shale gas exploitation on (a) water resources and (b) carbon budgets.
Oral Answers to Questions
Debate between Lord Barker of Battle and Caroline Lucas
Gregory Barker
We have to get away from this target mania that existed under Labour and understand that this is not some sort of Stalinist five-year plan. We are unleashing the power of the private sector, and as a result we will be far, far more successful than any of these top-down Whitehall programmes initiated under the previous Government.
Caroline Lucas (Brighton, Pavilion) (Green)
There is real concern that under green deal plans there is not enough money for fuel poverty. Will Ministers reconsider the possibility of recycling revenue from the carbon floor price and EU emissions trading scheme revenue into the ECO pot to top it up and to prevent the poorest customers from cross-subsidising rich customers?
Gregory Barker
The hon. Lady raises a serious point. I listened to what she said in the Energy Public Bill Committee, to which she made a constructive contribution, about how we should design the ECO and use it to tackle fuel poverty more effectively. More than half the £1.3 billion of ECO subsidy will be targeted at the fuel poor through various streams, which should go a long way to meeting her concerns about the need to ensure that the fabric of our housing and the improvements to it have the fuel poor at their heart.
Gregory Barker
We are very much engaged with all the energy-intensive industries, because we are absolutely determined in DECC to ensure that decarbonisation does not lead to de-industrialisation. On the contrary, if we are smart the low-carbon transition should enhance our competitive position. But that does mean being sensitive to the burdens that we place on manufacturing industry. We are starting with a package of compensation worth £250 million for energy-intensive industries, but that is only the beginning of a much more nuanced and ambitious policy.
Caroline Lucas (Brighton, Pavilion) (Green)
Will the Secretary of State join me in congratulating Brighton energy co-op on its launch last night of the first community generation scheme in Brighton? What is he doing to ensure that the electricity market reform proposals will properly support community energy schemes, particularly those by co-ops, housing associations and local authorities?
Oral Answers to Questions
Debate between Lord Barker of Battle and Caroline Lucas(12 years, 9 months ago)
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Gregory Barker
That is just the kind of technology that will be brought into the reach of millions of homes by the green deal, and it is just the kind of innovation that we want to spur. We would also look at how we might drive that by making amendments to consequential improvements. I am very interested in my hon. Friend’s ideas.
Caroline Lucas (Brighton, Pavilion) (Green)
It is understood that there has been a significant underspend, of up to £30 million, in the Warm Front scheme, because DECC has made the eligibility criteria too strict and has not promoted the scheme. That means that up to 20% of the scheme’s funding could go unclaimed. Is it correct that there will be an underspend at the end of the financial year, and if so, what is the reason for it?
Gregory Barker
The hon. Lady is right; we are slightly behind. The unseasonably warm weather that we have had this winter, compared with the cold weather last year, has meant that the number of applications has been lower. However, I am in touch with the leaders of our big metropolitan authorities, and I have spoken to the big six energy companies, Citizens Advice and others this week in order to drive forward the roll-out of Warm Front to ensure that we do not have the underspend that she has highlighted.
Feed-in Tariffs
Debate between Lord Barker of Battle and Caroline LucasUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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Gregory Barker
Absolutely. It is because we value the work of small and medium-sized enterprises and smaller companies that we do not want many of the larger companies simply to gobble up the whole budget within months. We will be listening carefully to SMEs and trying to provide a sustainable pathway that they can build on.
Caroline Lucas (Brighton, Pavilion) (Green)
I believe that the Minister is aware of Brighton energy co-op in my constituency, which uses investment for local people for community-owned solar panels. The project’s director is deeply concerned about the impact of these new proposals. Will he offer a stay of execution for community projects with planning permission so that they can get up and running and not be bound by the December deadline?
Gregory Barker
One of the faults of the scheme that we inherited from the Labour Government was that there was no way of recognising within the tariffs any sort of community scheme. One way in which we will reform the scheme will be to consider creating a special tariff for community schemes, which were totally ignored in the system set up by Labour Members.
Energy Bill [Lords]
Debate between Lord Barker of Battle and Caroline Lucas(13 years, 2 months ago)
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Gregory Barker
It is a pleasure to be back in the House to debate this historic Energy Bill one last time before it moves back for the last time to the other place. To better inform the debate on the amendments before us, I shall update the House briefly on the progress made over the summer on a number of issues that were raised in Committee.
We had a lively discussion on measures eligible for green deal finance. That was led by the hon. Member for Ogmore (Huw Irranca-Davies), who championed the power shower. I committed to an early refresh of the Government paper to take into account queries about our position on water efficiency and recommendation of measures outside the green deal. That has been done. After our exploration in Committee of the detail of the energy company obligation—an important part of the Bill—I agreed that my officials would meet the hon. Member for Southampton, Test (Dr Whitehead) to discuss our brokerage proposal. That has been done.
The private rented sector was another important subject of debate—fruitful debate, I hope—with contributions from the hon. Member for Wells (Tessa Munt), among others. I shall say more about that later. My officials are setting up a new workshop to look specifically at how the provisions can best work with older buildings, which present a challenge to the green deal, particularly older historic buildings.
Lastly, I am pleased to report progress on energy efficiency for service family accommodation, following the excellent suggestion of my hon. Friend the Member for Richmond Park (Zac Goldsmith). My officials have had a number of meetings with their counterparts in the Ministry of Defence and, having agreed the shared objective of improving the energy efficiency of accommodation, are investigating the best ways to achieve that. As I mentioned in Committee, it is a complex problem owing to the unique nature of service family accommodation. None the less, I am optimistic that a solution will be found to satisfy the House and, most importantly, service families.
We have a large group of amendments, not all of which were tabled by the Government. I propose to speak to the Government amendments in my opening remarks and address the other amendments in my closing remarks, rather than pre-empt them before the Members who tabled them have spoken. That should make for a more orderly debate. There is nothing more annoying than having one’s arguments addressed before one has even had a chance to make them to the House.
The Government amendments are largely technical. Government amendments 31 to 34 cover disclosure. They enable the Secretary of State, if necessary, to require a green deal provider to produce a further document containing information about the green deal plan as part of the confirmation process. This would be in addition to the energy performance certificate. Both documents would then have to be disclosed to future bill payers. These amendments therefore enable the Secretary of State to require, if necessary, additional information about the green deal plan to be given to future bill payers as part of the disclosure process. This small amendment responds to the concerns of stakeholders and the concerns that were expressed in Committee about consumer protection, particularly in the rented sector. We have moved to tighten that up.
On the transfer of payments, Government amendment 29 is a technical amendment that makes it clear on the face of the Bill that when collecting payments, energy companies are acting in an agent and trustee capacity for the green deal provider, which, in many cases, will not be the energy company itself. This is in line with the policy that I set out in Committee. Liability for green deal payments should sit on the balance sheet not of the energy companies, but of the green deal provider.
Without this clarification, there is a risk that payments received would be the property of the energy company until they were remitted to the green deal provider, which might enable an administrator to claim green deal payments in the event of energy company insolvency. Through the amendment we can minimise this risk and, as with all risk minimisation in this process, help to push down the cost of green deal finance.
On assessment and installation, I shall deal with a number of Government amendments relating to the role of professionals operating under the green deal, and consider them with amendment 26, tabled by the hon. Member for Brighton, Pavilion (Caroline Lucas). Amendment 26 and Government amendment 30 relate to the role of professionals and the importance of protecting customers, while allowing the green deal to thrive. I apologise for breaking the rule that I said I would abide by in my opening comments, but this makes more sense, so I hope the hon. Lady will forgive me. I am grateful to her for raising the issue of cross-selling.
It is important to consider how and when green deals are likely to take place. Many will come about as a result of other activities, such as the installation of a new kitchen or boiler in a home. We do not wish to limit these trigger points. They will often be important opportunities to promote the green deal alongside other renovations or improvements that are happening in the home, which the householder may not have considered ahead of planning for a new bathroom, kitchen or other improvement.
Our market research has shown that customers would welcome and are therefore more likely to trust the involvement of local authorities, community groups and third sector organisations when thinking about entering into a green deal. This was a recurring theme in Committee, when we all agreed that the involvement of local authorities and community groups was vital to ensure the successful large-scale roll-out of the green deal. Such organisations may see participation in the green deal as a way of making people aware of other valuable services—for example, loft clearance for the elderly is an essential prerequisite for putting in insulation. Some voluntary or community groups might offer such a service in some areas at no cost or at a reduced cost.
A blanket ban could reduce the willingness of these organisations to play a full and positive role in the green deal. This could be especially detrimental to vulnerable groups such as the elderly, who are most likely to benefit from energy efficiency. It could also affect the ability of enthusiastic volunteers and community groups to encourage their neighbours by knocking on their door, sharing their enthusiasm and urging them to join in community projects. Members of a community or neighbourhood group are more likely to go round and speak to their neighbours individually, rather than e-mailing or writing to them. We are concerned that a blanket ban could be detrimental.
Our approach is therefore to be mindful of the points raised by the hon. Member for Brighton, Pavilion. She is right to identify the need for strong consumer safeguards, but we believe the right way forward is to build on existing regulations that protect customers, and set out a clear enforceable framework within the green deal code of practice for such activities. This will be clearly set out in our consultation and we will seek further views on this important aspect then.
Caroline Lucas (Brighton, Pavilion) (Green)
Does the Minister agree that there is a world of difference between a community group knocking on a door in order to clear a loft so that loft insulation can go ahead, and selling wallpaper, carpets and sofas, which was the example that the Minister gave in Committee? Would he come some way towards supporting my amendment, given that it clearly says that it is permissible to knock on people’s door if the aim is to reduce CO2, but not if the aim is to sell a sofa?
Gregory Barker
I am sympathetic to the thrust of the hon. Lady’s amendment, but it is not illegal to sell things door to door. There is already a code of practice for that, but we do not live in a country where it is illegal for people to sell products door to door. That is already a fact of life and we do not propose to alter it; however, we do think there should be a strong code of practice. However annoying and regressive such practices may be, trying to address them outside a code of practice—that is, through blanket legislation—could affect not just loft clearance services, but the ability to go door to door, just as we as politicians go door to door trying to convince people of our ideas.
Gregory Barker
It is not correct to compare the two schemes. The German scheme consists of a normal personal loan, secured in the normal way. It must be applied for through the banks, and in the case of a successful application the interest rate is subsidised. That is the nub of the programme, which I have discussed in Berlin with the German environment Minister. There is a great deal more to the green deal, which involves substantial subsidy not of the interest rate, but of the interventions themselves. We expect that most solid wall installations will attract a substantial element of subsidy, and that other interventions for fuel-poor households and more vulnerable customers will also be able to attract subsidies. Customers may pay a competitive interest rate, but they will be doing so on a significantly subsidised final bill, and I would have thought that it was much better to pay a competitive interest rate on a smaller bill than a subsidised interest rate on a higher bill.
This is a fundamentally different proposition, therefore. The German scheme simply involves subsidies of existing loans. What makes the green deal unique is that it is not a personal loan in the way the German scheme is. It will be secured against savings on future energy bills. It will not add to the personal debt of the individual who benefits from the installations, and it will remain with the home. There is also the golden rule. I apologise for making such a lengthy intervention, but it was important to put that on the record.
Caroline Lucas
We discussed this matter in Committee, so I know that the Minister and I do not agree. I still do not think that the measures under the green deal will be significantly subsidised. I agree that we have the ECO pot of money for the fuel poor and hard-to-treat homes, but the figures that have been discussed in respect of the ECO are about £1 billion to £2 billion, which is a small amount given that we hope there will be mass take-up of the green deal. Most people who take up green deal provisions will therefore not feel that they are being significantly subsidised. I still do not agree with the Minister that this proposal will in its current form be attractive enough.
Gregory Barker
I should like to start by thanking the hon. Member for Brighton, Pavilion (Caroline Lucas) for tabling amendments 49 and 50 and my hon. Friends the Members for Manchester, Withington (Mr Leech) and for Brigg and Goole (Andrew Percy) for tabling amendment 28.
Amendment 49 would require that any energy efficiency services provided or products sold by green deal participants, in addition to those paid for with green deal finance, should be subject to the green deal regulatory framework. It is important to note that the green deal is an innovative form of finance agreement that is attached to the meter and therefore passes between bill payers. I think that we all understand that. So it needs specific protections, which are not necessarily relevant to those who do not take out the green deal.
I should like to assure hon. Members that we intend to require customers to be made fully aware of the difference between offers that fall under the green deal scheme, with all its specific safeguards, and those that fall outside. However, many of the forms of mis-selling that rightly concern the House can be prosecuted already under existing general consumer protection legislation. We will not accept companies using green deal accreditation as cover for less appropriate goods and services.
Amendment 50 would ensure that recommendations and estimated costs and savings are clearly and transparently communicated to the consumer as part of the green deal plan, thus enabling customers to compare offers. I should like to reassure hon. Members that we intend to require green deal providers to set out clearly how the proposed savings and costs meet the golden rule principle, as enabled by the power in clauses 4 and 5. I urge hon. Members to look specifically at clause 5.
In addition, the Consumer Credit Act 1974 will apply to domestic green deal plans in full, bar a few essential amendments, thus ensuring robust consumer protection, and it already regulates the provision of information to consumers who enter into credit arrangements.
Caroline Lucas
I wonder whether the Minister can clarify things a little further. On amendment 50 and comparability, is he saying that there are some guidelines somewhere that will ensure that many different green deal providers will be required to present the savings that are likely to accrue from investing in a green deal package in a similar way, so that they are genuinely comparable? On amendment 49, if a green deal assessor goes in and after a big assessment the householder decides not to take a green deal finance package but to pay up front, will they be unable to access things such as an advice line?
Gregory Barker
Such people can certainly access the advice line. If people choose to pay in full and not to take finance agreements, they will not be any less covered by the accreditation of all green deal service providers and the protection and warranties that go with all green deal products. We must not forget that the green deal is not just about financial arrangements where consumer protection kicks in. We will set out in further detail in secondary legislation, which hon. Members will thoroughly scrutinise, and go to great lengths to ensure that there is a rigorous consumer protection element to the accreditation of all services that are green deal applicable. That will apply whether or not they are financed by consumer credit. Obviously, all products must be specified and approved for use under the green deal to ensure that they meet the golden rule.
Gregory Barker
The hon. Gentleman’s question is predicated on a misunderstanding. It will simply not be possible for any consumer, poor or rich, to disaggregate their bill payments for the green deal, other charges and the energy consumed. There will not be that opportunity to withhold green deal payments, just as one cannot refuse to pay transmission charges or other levies that are included on the consumer bill. That will not be an option for them.
Caroline Lucas
Will the Minister confirm that he is still leaving the door open to using the green investment bank to support and subsidise the interest rates? I am not clear what he is saying specifically about the green investment bank.
Gregory Barker
That is a very important point. I do not rule it out completely. It is unnecessary to do so at this stage. But we do not anticipate that it will be necessary, and it is certainly not part of our planning and budgeting. Rather than the green investment bank subsidising interest rates at the consumer end of the journey, it is more likely that it will play a role in helping to pump-prime the liquidity in the bond market when we first see companies taking these aggregated packages of green deal finance and seeking to offer them into the bond market as new securitised products. In the long term, there is an exciting future, and there will be a lot of strong institutional demand for such products.
The conversations that we have had with the largest city institutions and banks have been encouraging and we have set up a working group. Short-term interventions to aid initial liquidity are more likely to be a fruitful use of green investment bank money. Although the coalition Government have promised £3 billion, substantially more than anyone anticipated at the general election, to fund this new important piece of financial architecture in the City of London, which will make a substantial difference to our economy and drive green growth, that money can be spent only once. The key to the green investment bank priorities must be to address market failure. We cannot keep spending that money time after time. There are many demands on the green investment bank funding, and if the market, as we believe, is capable of supplying competitive interest rates in a way that is affordable to most consumers, supported by the ECO subsidy, it would be quite wrong to use green investment bank money when we clearly need to prioritise other areas of the low-carbon economy as well.
Likewise, as the hon. Lady can imagine, DECC is pushing for an ambitious ECO. This is a huge opportunity that is extremely cost-effective, and in terms of the hierarchy of spend on the low-carbon transition, the ECO represents incredibly good value, particularly compared with forms of low-carbon generation; but, again, the ECO comes out of consumers’ bills, and there is a balance to be struck. We cannot keep pushing up the ECO, because ultimately that will start to become regressive. When the coalition came into government, we took steps to reduce consumers’ bills by taking off the cost of funding the CCS programme and taking it into general taxation. We took measures to ensure that the renewable heat programme would be funded not through consumers’ bills but out of general taxation, and that is a progressive measure. We have to ensure that we get the right balance and have an ECO that is good for consumers and does the job. We cannot treat it as a magic pot of money. It is paid by every energy bill payer, and more than ever, as world energy prices go up, they are scrutinising bills to ensure that they are getting good value for money.
Gregory Barker
The default rate will be the same as the standard default rate for electricity bills generally, which is a very low percentage. It is probably higher in the present economic circumstances, but when averaged out over a decade, it is very low compared with other instances, and it will not be extrapolated out of that. On the ECO, the hon. Gentleman seems to be trying to have his cake and eat it. The bottom line is that there is no magic source of money; it all has to come from somewhere and ultimately that is the taxpayer and the consumer, who are basically the same person in this context. We have to be very responsible and we are constantly looking for ways to lighten the load for hard-pressed consumers, who are concerned about rising energy costs.
We will publish in the autumn our expectations of how DECC policies, taken together, will impact on consumers through to 2020. The results of the early work are extremely encouraging. These things must be seen in the round—one strand of policy cannot be taken out as though it was part of a Woolworths pick ’n’ mix. We have to take the energy efficiency measures, the levies and our other measures to encourage greater competition in the energy sector as a whole. We will publish that in the autumn, when I am sure the hon. Gentleman will have an opportunity to quiz the Secretary of State.
Caroline Lucas
The Minister rightly says that there is no magic pot of money, but there are certainly progressive and regressive ways of doing this. Does he agree that putting a levy on all consumer bills, irrespective of the financial situation of the householder, is inherently regressive? Indeed, the impact assessment of the 2009 extension of the carbon emissions reduction target showed that using a levy actually pushed more people into poverty than were pulled out as a result of the CERT money.
Gregory Barker
I am listening closely to the hon. Lady, and I admit that the Government have not yet come forward with our proposal on the ECO. She seems quite clear about what it should involve, but I did not pick up the actual figure that she thinks would be right for it. Will she tell us what she thinks that figure should be, so that we can work out whether the sources of revenue would be sufficient to fund it?
Caroline Lucas
I thank the Minister for his intervention, and I am pleased to see his impatience for me to get to the crunchy bits involving the figures, which I will now do. The figures that I was quoting were from an all-party group chaired by the hon. Member for Southampton, Test that involved myself and a few others. The group believed that it would be necessary to have a minimum of £2.5 billion in the ECO pot specifically for low-income and vulnerable households involved; some members of the group felt that it should be £4 billion. We were therefore looking at between £2.5 billion and £4 billion, but that was intended not for solid-wall insulation in the able-to-pay sector; it was focused solely on low-income and vulnerable households.
We considered where we might be able to find such sums of money, including down the back of the sofa and so forth. Based on the Treasury’s own budgetary projections, the EU emissions trading scheme and the carbon floor price will bring in a combined revenue of £2.7 billion in the first year of the green deal’s operation, 2013-14, rising to £3.6 billion by 2015-16. If we were to choose to hypothecate those two revenue streams alone, they could be used to supplement the revenues of the ECO. That is exactly what many groups and individuals have recommended. A 2008 European Parliament directive recommended that at least 50% of revenues from EU ETS auctions of allowances should be devoted to environmental protections, including more efficient heating and improved insulation. In contrast to the UK, countries such as Germany, Hungary and Poland are doing exactly that.
Ofgem provided constructive support in its report to the Chancellor of the Exchequer in 2008, stating:
“In view of these pressures on prices the regulator has identified a windfall to the electricity industry arising from the free allocation of tradeable emission permits.”
That windfall still exists. The report continues:
“This could be used to fund aid for fuel-poor households: those who spend more than 10 per cent of their income on energy.”
The European Parliament and Ofgem are thus both in favour of such a move.
Caroline Lucas
If money were no object, I would love to see hard-to-treat homes subsidised through the ECO, even for those who are able to pay. We are living in financially constrained times, however, and I am therefore suggesting that we focus all the money in the ECO, which should be increased, on low-income and vulnerable households, of which a subset would be those low-income and vulnerable households in properties that are hard to heat and therefore need solid-wall insulation.
Gregory Barker
If the hon. Lady is not prepared to subsidise solid-wall insulation, does she accept that many able-to-pay customers will baulk at the substantial cost of such insulation, so there is a very real risk—it is almost certain—that we would be unable to hit our CO2 reduction targets? All the analysis of this problem that has come from a climate change or environmental perspective is absolutely clear that we will need to subsidise these currently expensive measures.
Caroline Lucas
I thank the Minister for his intervention. I hope he will allow me to explain my proposal. It would mean that for at least the first three years the ECO would be used for the low-income and vulnerable families that live in hard-to-heat homes. As about 40% of the low-income and vulnerable households do live in such homes, I am confident that if the revenues from the ECO were focused on that group of people, we would have a much greater uptake of solid-wall insulation and the price would come down far more quickly. If we were to use the bulk of the ECO to go house to house or street by street to some of the poorest, most vulnerable people, I believe it would have a far better environmental impact than sitting back and allowing market forces to see who happens to ring up the advice line to say, “By the way, I’m living in poverty in a hard-to-treat home, so could I have some support from the ECO?” What I am suggesting would be better for dealing with fuel poverty and also better for the environment—the figures suggesting that do stack up.
Oral Answers to Questions
Debate between Lord Barker of Battle and Caroline Lucas
Gregory Barker
That piece of landmark legislation, which my hon. Friend got on to the statute book having had long experience in these matters, will be an important part of our strategy for delivering a green deal programme that will bear down on and eventually eliminate fuel poverty. I can assure him that unlike the Labour Government, who allowed the Home Energy Conservation Act 1995 to languish on the statute book and be frittered away, we will ensure that the legislation is used effectively and that there is far greater co-ordination and collaboration between local government and us at the centre.
Caroline Lucas (Brighton, Pavilion) (Green)
When the Warm Front scheme is closed down, it will be the first time in 30 years that there has not been a Treasury-funded scheme to tackle fuel poverty, which is a major problem in constituencies such as mine. Will the Minister do all he can to persuade the Treasury to take its fair share of the cost of cutting poverty so that the full funding burden is not regressively applied to energy bills, thus hitting the poorest hardest?
Gregory Barker
Sadly, we know that in the past Warm Front has not been effective. Let us face it, more than 90 Members from all sides of the House, including Labour Front Benchers, have written to me to complain about it. Were we to carry on relying on Warm Front alone, it would take more than 80 years to treat homes which, under the green deal, we expect to treat by 2030. I have to say to the hon. Lady that there is funding next year, the year after and the year after that for Warm Front, but the real driver for eliminating fuel poverty will be the green deal and the ECO that underpins it.
Oral Answers to Questions
Debate between Lord Barker of Battle and Caroline Lucas
Caroline Lucas (Brighton, Pavilion) (Green)
2. What changes he proposes to make to the Warm Front scheme to ensure that it meets the needs of vulnerable fuel-poor households.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
As announced in the spending review, DECC will fund a smaller, more targeted Warm Front scheme over the next two years as we transition to the full roll-out of the green deal, with its energy company obligation. We will shortly be consulting on the proposed changes to Warm Front to ensure that the eligibility criteria reflect the coalition’s determination to focus on the most vulnerable households.
Caroline Lucas
Warm Front funding is to be reduced from £345 million to £110 million by next year—that is a 68% cut. The Government’s plans to try to bridge the gap are likely to be funded through a levy on consumer bills, but that does not take into account the fact that this perversely hits the fuel poor hardest. What account has the Secretary of State taken of the Government’s own figures, which estimate that although options such as an extension of CERT—the carbon emissions reduction target—might take between 21,000 and 31,000 households out of fuel poverty, the impact via increased fuel bills is that it results in 70,000 to 150,000 households being put into fuel poverty?
Gregory Barker
The coalition is very mindful of the impact of all levies on domestic fuel bills. That is why, in the comprehensive spending review, we decided, for example, not to go forward with plans to fund RHI—the renewable heat incentive—on the basis of a levy, but to fund it out of general taxation. However, I can assure the hon. Lady that we look overall at the benefits for the fuel poor that will accrue from access to the green deal, feed-in tariffs and social price support, as well as continuing support for Warm Front for the next two years. Taken together, this holistic approach will ensure that we continue to make progress against fuel poverty.
Oral Answers to Questions
Debate between Lord Barker of Battle and Caroline Lucas(14 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Gregory Barker
The hon. Gentleman has great experience in this sector and I am sure that his green credentials will stand him in very good stead in the shadow Cabinet elections, but I assure him that we are committed to having very robust rules and transparent mechanisms for land use, land use change and forestry—LULUCF. I hear what he is saying, but there are a range of options on the table and we have not yet reached a definitive end to this. We are absolutely committed to saving the rain forest, we have put the finance in place and we are leading the debate on this issue. We really are determined to push it further forward at Tianjin.
Caroline Lucas (Brighton, Pavilion) (Green)
Is the Minister convinced that the impact of the new EU regulation on illegal logging, which prohibits only the first placing on the market of illegally logged timber, will genuinely reduce emissions from land use changes to the same extent as the promise that the coalition Government now appear to have dropped, to legislate to prohibit also the sale or possession of illegally logged timber here in the UK, would have?
Gregory Barker
We have not dropped a commitment from the coalition agreement, but we will be looking very carefully at the new measures to see whether they can do the job. I remain as committed to ensuring that we are at the forefront of the battle against illegal logging as we were on the day we were elected.
Energy Efficiency
Debate between Lord Barker of Battle and Caroline Lucas(14 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text
Gregory Barker
Of course, CERT is an obligation on the fuel companies and is not part of the Treasury tax and spending regime as such. It will not be included in the comprehensive spending review. I share the hon. Gentleman’s concerns, given that we want to focus on the fuel-poor and that 15% seems a relatively limited amount of money. That is why, as I am going to say—he is pre-empting my speech—when we come to consider the long-term basis for the right form of supplier obligation when CERT ends at the end of 2012, we will need to ensure that it is effectively focused on the most vulnerable households and on the fuel-poor. That will be the key consideration when we are looking to frame a new and appropriate supplier obligation.
As I have said, the green deal is a real game changer. It takes policy out of Whitehall and on to the high street. The green deal is a dramatic change from the status quo. The green deal, we believe, will fundamentally alter the scale of delivery. In terms of scale, to put it in context, the green deal is even more ambitious than Mrs Thatcher’s sale of council houses in the 1980s. Whereas that transformed the lives of about 2 million families, the green deal has the potential to touch more than 14 million homes around the country. Now, there can be no one-size-fits-all model. Our green deal legislation must promote the emergence of a new and dynamic market, working for the incredibly diverse mix of homes in the UK. There must be greater consumer choice, but with a recognition of the need for fairness and, in particular, of the urgent and pressing challenges of fuel poverty.
The green deal will, we believe, unlock billions in new private capital to support energy efficiency, but that will not work effectively without the engagement and support of local communities. Local communities have a key role in driving this ambitious change. We have seen that in Kirklees, where community engagement has been vital for a universal take-up.
Caroline Lucas (Brighton, Pavilion) (Green)
The Kirklees example is an excellent one, and Green councillors have been instrumental in that. They were rolling out free insulation—that was the difference; it was free. Where does the hon. Gentleman think that the money will come from for the Government to be able to roll out such a scheme? Does he agree that we ought to be considering mechanisms such as levying a windfall tax on the energy companies, given that they will be getting windfall profits from their involvement in the emissions trading scheme—at least until 2013? Should we not be using money like that to enable such a scheme to be rolled out to everybody rather than depending on people in poor households having to take out what looks like a loan?
Gregory Barker
First, I welcome the hon. Lady to the debate. I am sure that she will be a key—and welcome—feature of such debates for the rest of the Parliament. Of course, CERT is already a levy on the energy companies and we have a clear idea of where the money is coming from. She mentions that in Kirklees the scheme is free, and that is an important point. We simply cannot afford to give free insulation to the whole country, even though it worked extremely well in Kirklees. However, through legislation and opening up new markets with new regulation, we can ensure that there is no cost up front to every single householder. Unlike other pay-as-you-save schemes that were trialled by the former Government, there will be no reference to the credit score of the household. It will not be a personal loan, a green mortgage or a charge on the property.
What will happen is that the right interventions for that particular property will be delivered and the costs of those interventions will be rolled up in their entirety and repaid through the energy bill for that property over 25 years. If that owner moves away, the cost will simply transfer to the energy bill of the next occupant. If the occupant changes energy company, the cost will simply transfer to the new energy company. We will make sure, through legislation, that it is impossible for a new energy provider to come in and provide energy without taking on the costs associated with the green deal finance. There is a real golden rule.
Gregory Barker
That is what I am saying, with the caveat that there are two big variables, the first of which is behaviour change. If someone decides, in their newly insulated home, to turn up the dial and hoover in the nude, that will affect the energy bill. Likewise, if there is a spike in oil prices or a surge in gas or electricity prices, that will affect bills. On an equalised basis, assuming there is no major behaviour change, the assumption in the model we are working on will be that the financing costs will always be less than the overall costs of installation.
Our ambition goes way beyond just household energy efficiency. Households, businesses, industry and the public sector all need to pull together to achieve the change that we need. For businesses, energy efficiency can make sense provided that they are not constrained by unnecessary bureaucracy. The green deal will apply to businesses too, and especially to small and medium-sized enterprises. It has the potential to help many companies improve not only their green credentials but their bank balances and their overall competitiveness.
I want our reforms to take energy efficiency away from the corporate social responsibility managers and plant it firmly on the desk of Britain’s finance controllers. Pioneers in this area are already demonstrating that energy efficiency makes real sense for business. To pick just one example, Marks and Spencer made a saving of £50 million last year alone through energy-efficiency measures. It is just one of thousands of progressive British businesses that realise that energy efficiency has a direct impact on profitability.
Marks and Spencer launched Plan A in January 2007, in which it set out 100 commitments to achieve in five years and the aim of improving fuel efficiency by more than 20%. Critical to Plan A has been genuine and consistent leadership from the very top of the organisation. Providing leadership from Government Departments is a responsibility that we cannot shirk, and that is why the new Prime Minister has committed the coalition to cutting emissions from central Government Departments by 10% in just 12 months. I am pleased to inform the House that work is well under way, but the 10% cut in Whitehall is just the starting point. We are engaged in a major, long-term drive to reduce emissions and save energy costs right across the wider public sector, which alone accounts for 3% of total UK carbon emissions.
The public can watch our progress: all Government Departments are now committed to publishing their energy use online and in real time. Seventeen Departments will publish energy consumption data for their headquarters buildings by the end of July, following the first meeting of the new cross-departmental energy committee. However, I am pleased to say that the Department of Energy and Climate Change, the Home Office and the Ministry of Justice have already made their energy-use information available online and in real time. We have also asked the private sector to join Ministers in this cross-cutting group, so that we can hold Departments to account and ensure that we learn the very best practice from business. This Government are determined to get our house in shape in short order, and we are already delivering clearer leadership, greater transparency and real change.
Caroline Lucas
I am grateful to the Minister for his support of the 10:10 campaign, which aims for 10% cuts in 2010. However, he will know that the campaign will not finish at the end of 2010 and that, if we are serious about tackling climate change, we need 10% cuts year on year thereafter. Can he make any statement now about what will happen at the end of 2010?
Gregory Barker
The hon. Lady is absolutely right. The important thing about our 10% cut is that it is a commitment made by the Prime Minister and it is being driven from the very top in government. She is absolutely right that 10% in one year is simply not enough, but it will be a terrific shock to the system in Whitehall and a great start. In the committee of which I am a member, and which is chaired by my right hon. Friend the Secretary of State, I have been very clear that it is only a starting point.
Achieving such reductions will get progressively more difficult, because behaviour change and the simple interventions that can be made at first cannot be repeated once they have been done. The task will require investment, but we are confident that most of that investment will pay for itself. The new models of investment—involving the energy services companies and the private sector, as well as enlightened and progressive facilities management contracts—mean that the cost of the infrastructure changes that will be needed will not necessarily fall on the public purse.
We are pushing very hard to draw in expertise from the private sector, and I am glad to say that that is largely being provided on a pro bono basis. We want to ensure that the Government, instead of being a national embarrassment, become a showcase for the best in British energy conservation. It is not at all impossible that, if we attach renewable energy sources to our estate, the public sector could one day become a net exporter of energy. Those are lofty ambitions and strategies but we will not superimpose arbitrary targets on them. There have been too many targets cluttering the landscape in the past. We know what we have to do, and the best thing that we can do is to get on and do it.
The potential benefits of energy efficiency are absolutely clear. This coalition Government are committed to making the UK a leader in energy efficiency, and to doing so with a completely new level of ambition and at a scale never before attempted. We are radically improving and refocusing existing policy measures, and we plan to bring forward completely new measures to deliver a real step change in ambition and delivery across both households and the business sector.
However, I would say this to the Opposition: there is much that unites us on this whole agenda, and we are building on the work begun by the right hon. Member for Lewisham, Deptford (Joan Ruddock) and her Front-Bench colleague, the hon. Member for Islington South and Finsbury (Emily Thornberry). The Liberal Democrats and the Conservatives supported the Climate Change Act 2008 in a constructive spirit, and I hope that we can forge a new consensus across the new House of Commons on energy efficiency and tackling fuel poverty. We should send a strong and united message to business and consumers alike that the time for action is now, and that we are united in laying out a new and clear framework for the long term.
I am glad to report that the new coalition has hit the ground running. We have a strong and ambitious green agenda, with energy efficiency at its very heart. The green deal will be at the centre of this Session’s flagship Energy Bill, along with other measures to drive low-carbon transformation and build energy security. It is clear from the Chancellor’s Budget, which committed to introducing a floor price for carbon, and yesterday’s publication of the work of the green investment bank commission, that we are making real progress already. There is a great deal more to do, and time for action is short, but I know that, by focusing on energy efficiency at the very outset, we are starting in the right place.