Energy Bill [HL]

Lord Foster of Bath Excerpts

Committee stage
Monday 19th December 2022 Grand Committee

[Baroness Young of Old Scone (Lab)]

My Lords, I rise to support Amendment 192 in the name of the noble Baroness, Lady Hayman, which has been so ably introduced by the noble Lord, Lord Ravensdale. The crux of it is that it calls for joined-up policies around energy demand management, low-carbon heat and energy efficiency by requiring a national energy demand reduction strategy.

I have the privilege of sitting on your Lordships’ Environment and Climate Change Select Committee, and our current inquiry, as noble Lords have already heard, is into the boiler upgrade scheme. Indeed, we had an interesting session with the Minister last week. We have been hearing evidence from the UK and internationally, particularly those countries which are further ahead on air and ground-source heat pump adoption than we are. Both national and international witnesses have confirmed the importance of the key elements of this amendment.

The first is joining up policies by having multiple instruments clustered together and working to maximise uptake of grants and loans. Regulatory bars on old technology should be signalled in advance, but not too far in advance. There should be public information campaigns and effective campaigning for the positive promotion of energy demand reduction.

The second feature that comes clearly in this amendment is that low-carbon heat is not enough. Our housing stock is among the worst in western Europe. Low-carbon heat needs to be linked much more closely than it currently is with effective energy efficiency programmes, and both need interlinked targets so that progress can be co-ordinated and measured. The whole issue of rising energy prices has brought this into sharp focus. We expect to see nearly 11 million households in fuel poverty this winter. Many of those households live in houses that typify the UK as having the worst-insulated housing stock in western Europe.

There needs to be huge progress in energy efficiency as part of the mix but I caution an overreliance on EPCs as a means of judging that, because they are very imprecise instruments. In fact, they can have some peculiar outcomes: if you have an air source heat pump installed in your building you will not necessarily get a higher rated EPC as a result. We have to be sure that we are not inadvertently placing a trap for ourselves for buildings, particularly old and heritage buildings, that will never reach EPC band C.

The third element of the integrated strategy the amendment calls for is the issue of skills in installing and maintaining low-carbon technologies, and in installing energy-efficiency measures. Energy-efficiency skills are much more timeworn and easier. Skills for installing low-carbon technologies are more complex and we are only at the beginning of the road. NESTA has estimated that there were around 3,000 heat pump engineers as of July. It projects that we will need around 27,000 heat pump engineers if the Government are to meet that target of 600,000 installations a year by 2028. There has to be a really big investment in skills programmes. I had a figure that I have now lost, but the German Government have put about €28 million towards skills improvement. We need to be in that ballpark.

The fourth thing is public engagement. I commend the Government for, at long last, having lurched into action with their “It All Adds Up” campaign, but that is rather late in the day and very much short term in the face of price rises. It needs to be sustained and not overly to rely on social media and the public being left to seek out digital sources. I am glad that it will contain a couple of TV ads, but you do not get much television advertising for an £18 million budget these days.

The national energy demand reduction strategy that the amendment proposes would be well worth while in bringing these issues together in a co-ordinated way.

[Lord Foster of Bath (LD)]

My Lords, I will speak to Amendments 197, 198A, 198B and 212. While I acknowledge that there are some differences between the targets referred to in Amendment 192 and my own, I nevertheless support the principles behind the amendment from the noble Baroness, Lady Hayman, which was so ably introduced. The main purport of my amendments, and part of her Amendment 192, relates to energy efficiency and the important, urgent need to improve that in some 19 million homes across the UK. which are currently classed as energy inefficient—those rated below EPC band C. I say in passing to the noble Baroness, Lady Young, that I entirely agree that we urgently need to address the way we take the measurements that we currently use in our very out-of-date EPC system.

I have raised the issue of energy efficiency on numerous occasions in your Lordship’s House and have arguing for a crash programme of energy efficiency to reduce fuel consumption and fuel bills for years to come. Yet, sadly, even in the past year, work on home energy efficiency has plunged by 50% and is now at its lowest level since 2018. A decade ago, 2.3 million homes had energy-efficiency measures being installed; now it is nothing like that.

--- Later in debate ---

[Lord Foster of Bath (LD)]

Before the Minister sits down, could he clarify whether the Government believe that the 2017 Clean Growth Strategy, which talks about achieving EPC band C by 2035 for all homes where this is feasible, affordable and cost-effective, is a target or now just an aspiration? Could he be clear on the language? He used “aspiration” a minute ago. In the documentation, and in every letter he has written to me and in every answer, it has been described as a “target”. I just want to be clear.

[Lord Callanan (Con)]

I think we are getting into semantics here. I am not sure there is a huge difference between them. My point is that it is not helpful to embed it in primary legislation. It is a target; it is an aspiration; it is something we are working towards that we want to try to deliver, but it is a complicated area with a lot of difficult policy choices and potentially a huge amount of expenditure.

[Lord Foster of Bath (LD)]

In the light of that, if “aspiration” and “target” are the same and the Minister is not therefore resiling from the 2017 document, could he tell me why the noble Lord, Lord Greenhalgh, and, more recently, the Secretary of State for Environment, Food and Rural Affairs have argued that there is merit in putting environmental targets into legislation? I do not understand where the problem comes. The Minister says the Government need flexibility in the way this is delivered. I do not disagree with that. I am sure that new technology will come along that will perhaps help to do this more efficiently, effectively and quickly. I hope that is the case, but the way in which a target is achieved is totally different from having that target. The industry has been absolutely clear that it is very keen to see a statutory target to give it the confidence it needs.

[Lord Callanan (Con)]

I disagree with the noble Lord. I have had many discussions with businesses and companies in this area, and we are providing the policy certainty they need. It is clear what direction the country is going in. We have listened to a lot of the feedback, have set out longer delivery programmes for the various schemes that we fund directly and are giving the certainty that people need. It does not make any difference to the industry, in terms of the policy landscape, to enshrine a target in primary legislation as opposed to it being an aspiration, a target or whatever other language the noble Lord prefers.