Oral Answers to Questions
Debate between Lord Barker of Battle and Ian Lavery
Gregory Barker
I am very glad to say that the Treasury is right behind the green deal and that the Chancellor has given £200 million to help drive demand for it. We are actively considering how we are going to spend more of it, as there is still a significant amount that has not been committed. We will make further announcements in the autumn.
I also congratulate my hon. Friend on his successful campaign to ensure that service families can benefit from the green deal and the ECO. I assure him that we are working closely with the Ministry of Defence to ensure that service family accommodation will for the first time mean warm and comfortable homes.
Ian Lavery (Wansbeck) (Lab)
In times of austerity, why on earth would people want to enter a green deal arrangement where the interest rate is three times higher than what they can get on the high street? Apparently, there are penalties for early repayment.
Gregory Barker
If ever there was an out-of-touch comment, that was it. How many of the hon. Gentleman’s constituents can get an interest rate on the high street of just 2% or 3%? That is just cloud cuckoo land nonsense. The vast majority of his constituents will be able to access green deal finance. I am glad to say that, with over 40,000 assessments, there is strong early demand. It is early days, but we are very encouraged by what we are seeing.
Jobs and Growth in a Low-carbon Economy
Debate between Lord Barker of Battle and Ian Lavery
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
This has been a great debate, with terrific contributions and thoughtful speeches by Back Benchers from all parts of the House. The level of expertise and knowledge on the green agenda across the Chamber never ceases to surprise and encourage me. I shall shortly address many of the points raised.
However, once again, the Labour Front Benchers were out of step with the mood of the House because of their desperate rush to score party political points at the expense of measured and informed argument. The fact is that the green economy, like the rest of the economy, faces a challenging time. There are real barriers and obstacles to growth to be navigated. The coalition is determined to tackle them with vigour, ambition and optimism. However, the green economy does not exist in a vacuum, and these are tough times.
There are no easy solutions for dealing with Labour’s legacy of debt and borrowing. In the real world, the green economy is confronted with the same financial challenges as every other industrial sector. Contrary to the gloomy, downbeat predictions from the Opposition, the green economy is rising to the challenge. It is bearing down on costs, introducing greater financial rigour and delivering better value for money for consumers and investors alike. Although there are no easy answers or quick fixes for Labour’s debt crisis, the green economy now has a Government who are genuinely on its side for the long term. Perhaps that is why Ernst and Young’s latest report upgraded the UK from the sixth to the fifth most attractive place in the world to invest in renewables, and why 80% of the 150 global investors in Credit Suisse’s recent survey voted for the UK as having the best regulatory environment for the next five years. After years of Labour’s stop-go policies, transparency, longevity and certainty are at the heart of our policy making.
Let me reassure the right hon. Member for Don Valley (Caroline Flint) that the coalition’s ambition to be the greenest Government ever has not withered; far from it. In 2012, our green agenda will move up a gear. This is the year in which the coalition will move from ambitious green rhetoric to bold deployment. On a range of iconic programmes, we are taking huge strides forwards. We are delivering the same level of ambition, but at a lower cost to the consumer. More green for less cost—that is the challenge for the low-carbon economy in 2012; that is “Green economics 2.0.” Many Government Members echoed that. We are happy to be judged on our record.
The plans to establish Europe’s first green investment bank are well under way. In the meantime, UK Green Investments will invest £775 million in the green economy. The green deal, our transformational new market for energy efficiency and the most ambitious home improvement programme since world war two will be launched in the fourth quarter of this year and will build momentum in 2013 and 2014. Europe’s first renewable heat incentive is already investing £860 million in British innovation.
The reforms to feed-in tariffs were challenging and difficult for many companies, but they were absolutely necessary. However, as a result of some difficult decisions that Labour shirked, we can afford to increase massively our ambition for solar and a range of other decentralised technologies. Thanks to the firm action to reduce the cost of FITs, we have a bigger scheme offering better value.
The year 2012 will be the one in which we finally shrug off the humiliation left by Labour of being the third worst country in Europe for renewable deployment. This year, we expect to install at least 4 GW of green energy—double the amount that we inherited from the Labour Government. We are also building for the long term, not only with our forthcoming electricity market reforms and their game-changing measures for energy efficiency and demand production, but with our ambitious plans for marine energy, which will harness wave and tidal power; a world-leading programme for carbon capture and storage; and the ambitious roll-out of a new nuclear fleet. That all means that we can face the 2020s with growing confidence.
The hon. Member for Sedgefield (Phil Wilson) spoke encouragingly of a range of renewable energy projects and initiatives in his constituency. I am happy to invite him to meet my officials to see how we can help to develop those programmes.
My hon. Friend the Member for Skipton and Ripon (Julian Smith) spoke with authority about CCS. He spoke up for the positive engagement that there now is between the industry and my Department.
Gregory Barker
I will give way if there is time a little later, but I want to respond to some more contributions.
The hon. Member for Vale of Clwyd (Chris Ruane) was right to flag up the extraordinary industrial innovation in the green sector, which is creating jobs in his constituency.
My right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) spoke with genuine passion. I understand his long-held views on nuclear power. Although he takes a different view from mine, I welcome his canter through the range of other coalition policies that he wholeheartedly endorses. I thank him for paying tribute to the right hon. Member for Eastleigh (Chris Huhne) for his contribution to the international climate negotiations at Cancun and especially at Durban, where he played an important role.
The hon. Member for Edinburgh North and Leith (Mark Lazarowicz) spoke strongly in favour of the green investment bank. I assure him that we are pressing ahead at full speed with that flagship coalition policy, which was announced in opposition and is being seen through in government by our reforming Chancellor.
My hon. Friend the Member for Great Yarmouth (Brandon Lewis) is a great champion for a range of renewables, especially offshore wind. His active support for a huge number of new green jobs in this area is very valuable. I assure him that we are determined to maximise the value to British business of the deployment of these new technologies, unlike Labour. In the last offshore wind farm to be constructed under Labour, 80% of the components were manufactured overseas and imported. That is a shameful record that the coalition is determined to turn around.
My hon. Friend the Member for Waveney (Peter Aldous) was right to point to the important role that East Anglia can play in the new green economy. I listened carefully to his thoughtful comments and suggestions. I was only sorry that my hon. Friend the Member for Suffolk Coastal (Dr Coffey) was cut off in her prime, rather like Adele at the Brits, when extolling the virtue of the East Anglian energy coast.
The hon. Member for Kingston upon Hull North (Diana Johnson) was right to celebrate the investment in her area by Siemens and to praise the many local individuals who worked hard to secure it. However, she is wrong to think that there was not a strong and concerted push from Downing street and my Department to bring that investment to her area.
My hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) was right to focus on the excitement on the Back Benches about a range of innovative new technologies that are coming forth and fuelling a green recovery, particularly the anaerobic digestion initiatives in her constituency.
My hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) made a great speech. He was right to point to the falling costs of wind energy and its future as a reliable source. He was also right to remind us that home-produced renewables not only help us to meet our carbon targets, but add to the UK’s energy security by reducing our exposure to fluctuating international fossil fuel prices.
The hon. Member for Scunthorpe (Nic Dakin) was right to point to the need for more skills. I think he will be pleased about further announcements that my Department will make shortly on that issue and on apprenticeships.
My right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) injected a degree of rigour back into the debate. I am afraid we do not always see eye to eye on these issues, and I have to say that the green investment bank will play a very powerful role, not least in leveraging in many times more money in private capital than from its own capitalisation. It will be a real lever for growth. I am now in a position to make a new announcement to the House about the location of the green investment bank: I can formally confirm that it will not be in Hitchin.
The hon. Member for Islwyn (Chris Evans) spoke about our use of natural resources and the need to install energy efficiency measures in homes, and I agreed with many of his points.
Despite the partisan note injected by Opposition Front Benchers, I believe that there is still much that unites Members throughout the House in their commitment to green investment and climate change. The real difference, however, is that Government Members believe in enterprise, the private sector, innovation and the genius of British business. The Labour party, I am afraid, is retreating to its left-wing comfort blanket of heavy-handed regulation, punitive taxation, fat Government subsidies for the chosen few and the dead hand of state planning. That is not our vision. We believe that the green economy can be an engine for growth, not a burden on taxpayers.
Globally, the clean energy sector continues to show dramatic growth, and we are determined for the UK to seize an increasing share of that valuable world market. Here at home, the Labour party had 13 years to deliver on the ground, but for all the big talk, its achievements were very modest. Come 2015, this historic coalition will be very happy indeed to be judged on its record of delivery.
Question put.
Energy Bill [Lords]
Debate between Lord Barker of Battle and Ian Lavery(13 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Gregory Barker
I have not raised the matter in person, but my officials are working closely with a number of Departments—including, importantly, BIS—on that important element of the green deal proposition. We are satisfied that the OFT will have sufficient resource properly to monitor the green deal, and we will keep that under review as the green deal rolls out.
I will deal now with new clause 10 and the consequential amendment 36. The new clause has been tabled to replace the Opposition’s amendment on green deal apprenticeships, which we accepted in Committee—a great personal victory for the hon. Member for Liverpool, Wavertree (Luciana Berger). As I said at the time, it is important that we take expert drafting advice on any amendment to a Bill, however well intentioned it might be. I reiterate that we fully support the creation of apprenticeships in green deal-related trades, and we will be happy to report to Parliament on our progress, as the hon. Lady requested. We believe that the new clause captures the spirit of her amendment; it simply clarifies a couple of technical matters regarding the exact nature of the new obligation. It requires the Secretary of State, before making the first framework regulations, to report to Parliament on the steps that he has taken to encourage green deal installation apprenticeships. I hope that that satisfies the hon. Lady.
Taken together, these are important measures in what will be the most ambitious home improvement programme since the second world war, and I hope that the whole House will support them. There are other amendments in the group that I have yet to address.
Ian Lavery (Wansbeck) (Lab)
Getting back to the financing of the green deal, is the Minister aware that 1.9 million people are in arrears with their energy bills, and that that number is increasing by the day because of the increasing price of energy? Is he also aware that 5.5 million people are living in fuel poverty, and that that figure is also rising by the day because of the problems with the energy companies? Will not those people who have been unable to pay their bills have difficulty in gaining access to finance for the green deal?
Gregory Barker
Of course they will have access, although it might vary in individual cases—I cannot give a universal commitment. The hon. Gentleman is right to raise fuel poverty, and in the Adjournment debate this evening called by his hon. Friend the Member for Glasgow North West (John Robertson) we will be able to debate the matter more specifically. Importantly, for the most fuel-poor there will be the energy company obligation. We fully recognise that a significant number of families will simply not be able to afford to pay for the green deal interventions through paid-for savings, because if they cannot afford to spend the money on heating in the first place, they will not capture the savings. We will therefore ensure that the very substantial energy company obligation will be directed towards meeting the needs of those vulnerable consumers.
Ian Lavery
The energy company obligation does not wholly focus on the people I mentioned, though. My worry is that the 1.9 million people in arrears and the 5.5 million people in fuel poverty—the poorest and most vulnerable, many of whom are elderly—will not be able to get finance under green deal. I am worried that that will create more poverty and do great harm to those who need help the most.
Gregory Barker
One or two, or small numbers, may fall through the net, but by and large we have to think about how the green deal will be implemented. Many of the families and individuals the hon. Gentleman is worried about will be captured by community roll-out and street-by-street roll-out of energy efficiency improvement schemes. We have the ECO so that we can offer whole communities the same service on an equal footing, regardless of their ability to pay. We will have to think about how to ensure fairness, because we want to include people living in isolated communities or those living in a relatively prosperous areas in a detached home, perhaps on their own, but I think the vast majority of the types of vulnerable consumer the hon. Gentleman is worried about will be captured by the whole-community approach that we anticipate will be taken up by many local authorities in street-by-street approaches. We need the ECO to be able to offer insulation and home improvements to whole streets, regardless of income, to ensure that we do these things at scale. I do not pretend that we have the perfect solution, but I believe that what we have is by far the best approach in comparison with anything tried before.
With that, I will finish. I will respond to the other amendments raised by hon. Members when I wind up the debate on this group.
Gregory Barker
I know that the hon. Gentleman is not quite an unreconstructed, planned-economy socialist, but he is confusing means with ends. The purpose of the green deal—our starting point and our end point—is to meet our carbon budgets and fulfil our legal and statutory obligations under the Climate Change Act 2008, which was introduced with the support of Members in all parts of the House. For decades, we have singularly failed to drive effective home energy efficiency and, come to that, energy efficiency in the business and industrial sectors. Given the size of the deficit and the burden on the public purse, we are living in cloud cuckoo land if we imagine that we would drive down carbon emissions and transform home and business energy efficiency if we left the private sector untapped. We will achieve our objectives only if we harness effectively the power of the private sector. Of course, people will make profits, but provided that that is transparent and fair, I do not have a problem with it. It is called job and wealth creation, and spreading that widely. We do not have enough wealth creation in the UK—we need more—and the green deal will be an incredibly important vehicle in helping us to rebalance our economy and making us more efficient.
We should not ignore that, but it does not detract from the fact that the central aim of the legislation is to allow us to meet our stretching carbon reduction targets. The coalition is absolutely committed to doing so, and the green deal is the means to that end, so we should not confuse the two as the hon. Gentleman did.
Amendment 28, which was tabled by the hon. Member for Manchester, Withington and my hon. Friend the Member for Brigg and Goole, seeks to ensure that we have powers to place restrictions on interest rates that can be offered as part of the green deal plan. I understand the concerns that my hon. Friend the Member for Brigg and Goole articulated in his thoughtful speech, but I can assure him and other hon. Members that clause 5(1)(b) already provides the power—we accept the point that the hon. Gentleman is making—to limit interest rate structures that can be applied to green deal plans. It will not be possible to create a valid green deal plan, unless it specifically complies with the conditions contained in, or made under, clause 5.
The green deal is a market mechanism, and the golden-rule principle will create a natural incentive to drive down costs, so the Government do not intend to place restrictions on the level of interest charged. However, we are considering broader restrictions to ensure that green deal plans are equitable not just for the first but for all subsequent bill payers. This could mean limiting interest rate structures offered to domestic customers to those with the greatest likelihood of the golden rule being met in the first and subsequent years, and we will be consulting on what is quite a complicated area, not just with stakeholders in the financial services sector, but with all concerned stakeholders.
I would certainly welcome the thoughtful input from Members on both sides of the House into this important area of how we ensure we get the most competitive interest rate for the consumer. I invite my hon. Friend the Member for Brigg and Goole, the hon. Member for Manchester, Withington, and other hon. Members who have spoken in the debate and expressed legitimate concerns, to meet my officials so that we can ensure that we take notice of their concerns and take advantage of some of their ideas. I hope that I have been clear throughout proceedings on the Bill that we do not have a monopoly on the best ideas. As we develop the fine detail of the green deal, I am more than happy to work with them.
We recognise that the interest rate is only one of the drivers of affordability. We do not want unnecessarily to focus just on the interest rate. The actual cost of the products, particularly things like solid wall insulation, will be a key driver. Replacement windows are in a very exciting place. For the first time, because of technical innovation and the increased thermal value of new glazing, and because prices are coming down, we can anticipate that we will be able to include glazing in windows. Consumer-facing home improvements will come within the remit of the green deal, and make it much more attractive. The green deal will not just be about out of sight, out of mind, hidden interventions in a household, but about things that people will really value on a day-to-day basis.
Ian Lavery
Will the Minister give a categorical guarantee that anyone who cannot pay the green deal part of the bill will not have their supply disconnected?
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.