Domestic Energy Efficiency

Amber Rudd Excerpts

Tuesday 21st October 2014 Westminster Hall

[The Parliamentary Under-Secretary of State for Energy and Climate Change (Amber Rudd)]

It is a great pleasure to serve under your chairmanship, Mr Streeter.

This debate comes at the start of big energy saving week, a joint campaign between the Department of Energy and Climate Change, Citizens Advice and the Energy Saving Trust that will highlight the support available to help people keep warm this winter. It was good to see so many parliamentary colleagues at yesterday’s launch. During the last big energy saving week, 300,000 consumers received help and advice through events, by phone or online. This year we and our partners want to make big energy saving week even bigger than last year.

The independent review of fuel poverty enabled us more fully to understand the problem and to measure fuel poverty effectively. That has helped us to put in place policies that can target assistance at those most in need, which the hon. Member for Hyndburn (Graham Jones) spoke about earlier. We already have strong policies working on the ground, such as the ECO, the warm home discount scheme and the big energy saving network, but we recognise that the most vulnerable may still need extra help.

To highlight the Government’s commitment to making a real and lasting difference on fuel poverty, we have tabled draft regulations to create a new fuel poverty target in law. We want to ensure that as many fuel-poor homes as reasonably practicable achieve a minimum energy efficiency standard of band C by 2030. We have also consulted to help us to prepare for a new fuel poverty strategy.

[Graham Jones]

I welcome the Minister’s comments, but I asked a fundamental question. How does she anticipate that constituencies such as mine in Hyndburn, which have a considerable mass of such fuel-poor people and hard-to-treat and uninsulated properties, will be addressed in the next five and a half years?

[Amber Rudd]

I appreciate that the hon. Gentleman wants me to get straight to the point and address his key questions. I have a few minutes, and I would like an opportunity to set out what the Government are doing.

We recognise that improving domestic energy efficiency helps consumers to control energy bills, thereby reducing fuel poverty. Of course, it also contributes to our challenging carbon reduction target, which is, by 2050, to reduce greenhouse gas emissions to at least 80% below 1990 levels. To drive up domestic energy efficiency, we have put in place a long-term programme that reflects fundamental underlying challenges. Much of the easy energy-efficiency work has been done. Nearly all homes have at least some loft insulation, although many could benefit from a top-up, and most of the easiest cavity walls have been filled. We need to move away from a culture of unsustainable grant dependency to a different, market-based approach. Our long-term aim is for consumers to be motivated to improve their homes and to be ready to meet some of the costs, with real, effective help for the most vulnerable. That is good for all bill payers, as subsidy will go where it can have the most effect; and it is good for our economy, as innovative businesses will enter the market and develop better, cheaper products.

[Guy Opperman]

In private meetings and in meetings with my constituents, I have spoken to the Minister about oil companies having a 500-litre minimum limit for delivering to people who are off-grid. If the Department were to change that minimum delivery to a lower figure, it would have a massive impact on people who are particularly fuel-poor and off-grid. Could she please look at that and get back to me?

[Amber Rudd]

I thank my hon. Friend for that comment. He has raised the matter with me previously, and I will get back to him.

I do not want to try the patience of the hon. Member for Hyndburn, so let us move on to the ECO, which is the particular element of support that he has asked me to address. We have made changes to the ECO, and the vast majority of customers pay for the ECO as part of their energy bills. With bills rising, it was right to review the impact of the policies on household costs and to ensure that the benefit of the ECO is directed where it can make most impact. This much is clear: we have not reduced the element of the ECO aimed at helping low-income and vulnerable households. Approximately two thirds of the ECO that is currently collected goes to the fuel-poor, which, overall, is the same amount as was previously set, despite the reductions. The hon. Gentleman talks about the Government cutting the energy companies some slack, but we have felt obliged to cut taxpayers some slack. At the same time, we have ensured that the people who are most in fuel poverty, the vulnerable, are still being given the assistance that was pledged. Dedicated fuel poverty activity within the ECO stays at the original level of investment of £540 million a year reaching 230,000 households, and we have extended activity on the same scale to 2017.

We are also making the ECO easier and cheaper to deliver, and we have extended the carbon saving community part of the ECO to cover the bottom 25% of areas on the index of multiple deprivation, extending it to more households in low-income areas. That will not only help more hard-pressed families; crucially, for the first time, extending the obligation to the end of 2017 will give industry and other partners maximum certainty. The hon. Gentleman discussed business’s need for certainty. We have delivered that by extending the obligation to 2017.

[Graham Jones]

I appreciate that the Minister is giving way on her time. I generously admit that the carbon savings target for individual households was reduced, rendering the scheme worthless in that it could not actually be used, but how will the community target have an impact on district councils such as mine? It was essentially designed around local authorities, but small district councils such as mine are cash-strapped, and the shire does nothing. How can local district councils such as mine help community schemes meet the community target? It is not happening.

[Amber Rudd]

I urge the hon. Gentleman’s council to consider what it can do within the current ECO arrangements, which as I said have been extended for the next two years.

Turning to the green deal home improvement fund, which I also urge his council to consider, he is absolutely right. The green deal home improvement fund opened in June and was closed at the end of July, such was the take-up. It was more popular than any of us had expected. We had always said that the pot of money available was limited and that once it was gone, it was gone, but we did not anticipate that demand would be so strong, and we have acknowledged that that was not ideal for householders, industry or local authorities such as the hon. Gentleman’s, which might have promoted the scheme to residents.

However, the good news is that we have sourced additional funds and will reopen the green deal home improvement fund next month. We are working closely with industry, local authority and other partners to get their views on how the first phase worked and their ideas on how we can improve the scheme.

[Graham Jones]

Can the Minister ensure that authorities such as mine that are deprived according to the index of multiple deprivation—our district council has challenges in trying to bid for the money quickly; they will inevitably be slow out of the blocks, because they do not have scale and size—are prioritised and given first dibs on the fund? That would be helpful in meeting some of the concerns that I have outlined.

[Amber Rudd]

I thank the hon. Gentleman for that suggestion. We are keen to get the green deal home improvement fund absolutely right. I will take his suggestion back to my officials. We are getting a lot of contributions on how to ensure that the new green deal home improvement fund is correctly launched in order to get the maximum benefit for communities, particularly the most vulnerable communities, who have been suffering.

I hope that we can reassure the hon. Gentleman that the green deal home improvement fund will be an additional source that his council can access to help the people who need help, particularly with solid wall insulation, as he said. I recommend that his council contact my Department to find out more about a previous fund called the green deal communities fund. His council might be interested in finding out about its best practice. It had particular success in going street by street, door to door and working with community leaders to build trust among householders so they could use the fund.

I wanted to take a few minutes to comment on the private rented sector; I am not sure whether the hon. Gentleman has a particular interest in that area.

[Graham Jones]

indicated assent.

[Amber Rudd]

That is good. We want to support and encourage landlords to make improvements to their properties and empower tenants to request them. That is why, on 22 July 2014, we launched our consultation on energy efficiency regulations for the private rented sector. As a result of our proposals, from April 2016, private tenants will have a right to request consent for energy efficiency measures, which may not be unreasonably refused by the landlord. From April 2018, private rented properties will need to achieve a minimum energy efficiency standard before being let to tenants, except where certain exemptions apply.

[Graham Jones]

I am grateful to the Minister; she is being very helpful. I point out to her for the record—she may or may not wish to comment—that I sat on the Energy Bill Committee in 2011 when that proposal was introduced. I voted against it, because I thought that the dates should be brought forward to 2011 from 2018. For seven years, people in the private rented sector have had to suffer. The Government are not doing this today; it was in the 2011 Energy Bill. I wanted that to be a matter of public record.

[Amber Rudd]

I think I can accept that as cautious support for the proposals, although they are less timely than the hon. Gentleman would like. He may rest assured that my Department is committed to delivering them, and we will use our best endeavours to do so.

I point out that although the hon. Gentleman’s constituents may be able to access the green deal home improvement fund, green deal finance is also available and is now picking up. It is also an important element for the private rented sector, where the electricity bill payer is normally the tenant, who contributes towards the cost of improvements through savings on their electricity bill. Tenants will benefit from a warm, healthier home while landlords will gain improvements to their property. The ECO and incentives announced as part of the autumn statement 2013 provide additional funding support for landlords to make improvements. Landlords took advantage of both the green deal cash back and home improvement funds, and nearly 115,000 households in the private rented sector have benefited from the ECO measures so far.

I point out to the hon. Gentleman that with the arrival of smart meters, which are now being rolled out, constituents will hopefully be able to control their use of energy and heating more effectively and efficiently. We are also making good progress on encouraging the take-up of local renewables. The number of installations, mainly of solar photovoltaic panels under the feed-in tariffs, now totals more than 590,000. The domestic renewable heat incentive was launched in March this year, and 10,000 homes are already being rewarded for switching to biomass, ground or air source heat pumps and solar thermal technologies.

I hope that the hon. Gentleman will appreciate and agree that although he has certain frustrations that the ECO is not reaching some in his community, this Department is leading many other initiatives to assist everybody, including his constituents, to have warmer homes for less. It is an ambitious long-term programme. We are making progress and learning what works best. The scale of the funds that we have made available shows our determination to improve homes, reduce bills and fuel poverty and meet our carbon reduction commitments.