Biodiversity Loss

Debate between Barry Gardiner and Caroline Lucas

Wednesday 15th May 2024 Westminster Hall

[Caroline Lucas (Brighton, Pavilion) (Green)]

I beg to move,

That this House has considered biodiversity loss.

It is a real pleasure to serve with you in the Chair, Ms Rees, and to open today’s debate on biodiversity loss.

It is now less than six months until COP16 takes place in Colombia—the first summit since the Kunming-Montreal global biodiversity framework was agreed in 2022, when countries committed to

“halt and reverse biodiversity loss by 2030.”

The meeting will be a crucial opportunity for global leaders to demonstrate how they are delivering on the commitment to restore our depleted natural world, and it is a moment for our own Government to step up as well.

When the then Secretary of State for Environment, Food and Rural Affairs, the right hon. Member for Suffolk Coastal (Dr Coffey), gave her statement to Parliament following the Kunming meeting, she promised to

“make this a decade of action”.—[Official Report, 19 December 2022; Vol. 725, c. 47.]

But what have we seen since then? Raw sewage continues to pour into our waterways, including for more than 4 million hours last year, according to the Environment Agency statistics. There have been repeated so-called emergency approvals of neonicotinoids, a poison so powerful that a single teaspoon is enough to kill 1.25 billion bees. And just this weekend, it was reported that the Government are poised to row back on their commitment to ban the sale of horticultural peat this year, and are seemingly content to see precious peatlands further degraded. It is hardly a reassuring picture.

[Barry Gardiner (Brent North) (Lab)]

I absolutely agree with what the hon. Lady is saying. She mentions COP16. Later this year, the world will meet in Colombia for the biodiversity conference, which is of critical importance. She will be aware that Colombia has joined the Beyond Oil and Gas Alliance, yet the Government of the UK—a similar-sized oil and gas producer—have not. Does she believe that one of things we should be doing before the biodiversity COP is to join Colombia in the Beyond Oil and Gas Alliance?

[Caroline Lucas]

I agree wholeheartedly. I will come to that issue in a moment, but joining the Beyond Oil and Gas Alliance does not mean that we will end oil and gas tomorrow. It is a commitment over time, and it sends out a massively important signal to the rest of the world. Frankly, the fact that we have not signed up tells its own story, unfortunately.

The “State of Nature” report, published last year, shone a spotlight once more on the horrifying decline—let us call it what it is: the wanton destruction—of biodiversity across our four nations. It showed that, in that well-worn formulation, the UK is now one of the most nature-depleted countries on Earth. In the course of my lifetime alone, the abundance of species studied across the UK has fallen by almost 20% on average, meaning that just half of the animals, insects and plants with which we are privileged to share our home now remain—from the mosses and the lichens in our woodlands to the internationally important seabird populations that breed on the cliffs and rocky islands of the coastline.

This is a disaster so extreme that, frankly, it is hard to contemplate. Imagine if we lost half our population, or if half the country was swallowed by the sea, or if half the country’s financial wealth was squandered; and yet we have sacrificed, seemingly with few regrets, half our natural inheritance. Scientists are now warning of what they term “acoustic fossils”, as the natural world falls silent and once familiar sounds, such as the dawn chorus, grow quiet or are lost altogether. It could not be clearer that nature is in freefall. Without urgent action to not just halt but reverse its decline, species risk being lost forever from our skies, land and waters. That is a disaster for the individual species concerned, including my favourite bird, the swift, which can fly an extraordinary 1 million miles in the course of its lifetime.

Offshore Petroleum Licensing Bill

Debate between Barry Gardiner and Caroline Lucas

Committee of the whole House
Tuesday 20th February 2024 Commons Chamber

[Caroline Lucas]

The best way to make use of those skills is by making sure that we put resources behind those workers so that they can make the transition, which so many of them want to do, into renewables. Right now, those workers are actually having to pay to make that transition themselves. They have to pay for the training. [Interruption.] They do. I tabled an amendment to a previous piece of legislation on education and training to try to make it much less onerous for oil and gas workers to shift into, say, the renewables sector. We need to have those plans, and we need the resources behind them to make that a lot easier than it is today.

The result and the reality is that the number of jobs in the oil and gas sector has already dropped by more than half over the past decade, despite hundreds of drilling licences being issued. The just transition plans test would be met in a year if the Oil and Gas Authority assessed that all existing seaward area production licence holders have published just transition plans for their workforce that are compatible with limiting global heating to 1.5°. Amendment 14 specifies that those plans must be agreed through formalised collective agreements with unions, and that they apply to all workers whether they are directly or indirectly employed—or, self employed, which is vital with the heavy casualisation in the oil and gas workforce.

Indeed, a report in 2020 revealed a high level of concern about job security and working conditions in the oil and gas industry, and that 80% of surveyed workers would consider moving to a job outside that particular sector. Furthermore, given the opportunity to retrain to work elsewhere in the energy sector, more than half would be interested in renewables and offshore wind. Workers are ready to lead a just transition, yet a more recent report has revealed that

“companies are increasingly announcing net zero targets—but there is no example in the UK oil and gas sector of worker involvement in decision-making on decarbonisation.”

That must change.

This amendment would be a step towards delivering a just transition that would see workers at the centre of transition planning, with a clear and accessible pathway out of high-carbon jobs. Rather than propping up jobs that we know are not going to exist in the future, the Government should be actively supporting workers to transition out of the oil and gas sector now, while also addressing their very real concerns, such as the cost of retraining, which is often borne by workers themselves, or the inferior employment protections offshore, which can lead to wage under-cutting. There are even some cases of seafarers working in the offshore wind sector being paid below the minimum wage. That is a scandal, and the Government should urgently establish a wage floor to apply to all offshore energy workers, regardless of nationality, who are carrying out any work on the UK continental shelf. The failure to deliver a just transition is not an inevitability, but a political choice. If the Government are serious about listening to workers and protecting jobs, they should have no problem supporting this amendment, which puts job security at the heart of the transition.

I note that the hon. Member for Angus (Dave Doogan) has tabled amendments 10 and 11 on a just transition, but I have to say that I do have two serious concerns. First, according to the drafting of amendment 11, the SNP test will be met

“if the OGA assesses that…new licences will support the delivery of the North Sea Transition Deal’s…emission reduction targets”.

Yet, as we know, the 50% reduction by 2030 which is in the NSTD proposal, against a 2018 baseline, is far weaker than the 68% reduction recommended by the Climate Change Committee, which it says is achievable. It is also important to note that this only includes scope 1 and 2 emissions, so it fails to take account of emissions produced when oil and gas is burned. Secondly, there is no provision to consult workers as part of this test. Therefore, given that it would fail to deliver a worker-led transition and it also exceeds the advice of the CCC, I sadly cannot vote for that.

Before concluding, I offer my support to a number of other amendments. First, I support amendment 12, on banning flaring and venting, tabled by the right hon. Member for Reading West (Sir Alok Sharma). As others have mentioned, Norway banned routine flaring back in 1971, giving the lie to the Government’s claim that UK gas has lower emissions.

Secondly, I support amendments 19 and 20, tabled by the right hon. Member for Doncaster North (Edward Miliband), to amend the carbon intensity test and to include all gas, not just LNG. Given that we import most of our gas through a pipeline, it is utterly ridiculous to compare UK production with LNG that is vastly more polluting.

[Barry Gardiner]

There has been much debate today about the alternative of LNG from Qatar, but there has been a failure to take into account whether our being more dependent on LNG from Qatar would in any way change what Qatar does about its own production. It has been recorded that Qatar will increase its production by 67% by 2027, which means that that energy will be produced and will have certain emissions. At the end of the process, we might have produced something with fewer carbon emissions, but it would be better not to produce them at all.

[Caroline Lucas]

The hon. Member makes a characteristically wise and useful point. That figure of 67% is startling and deeply worrying.

Thirdly, I support amendments 22 and 24, tabled by the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle)—I hope I can call him an hon. Friend—setting out a home energy efficiency test. As we all know by now, that is the most effective way of delivering real energy security for households that are struggling so much to pay their bills.

Fourthly, I support amendments 23 and 25, again tabled by the hon. Member for Brighton, Kemptown, requiring the UK to have made arrangements to withdraw from the energy charter treaty before new licences can be awarded. It is totally unacceptable that the Government are mandating annual licensing rounds without having withdrawn from a treaty that allows companies to sue for lost profits. The Government previously committed to reviewing the UK’s membership of the ECT, including consideration of withdrawal from the treaty if proposed modernisation reforms were not agreed at November’s energy charter conference. As I understand it, those proposals were not even discussed at the conference, so may I ask the Minister, when he sums up, to say what is holding up their withdrawing from that treaty, given that they acknowledge that

“there is now no clear route for modernisation to progress.”

Finally, last week it was reported that British Gas profits soared tenfold last year following the changes Ofgem had made to the price cap. In the same week Government figures showed that almost 9 million households—well over a third—spent more than 10% of their income after housing costs on domestic energy bills, and it was also revealed that not a single new proposal for public onshore wind was made in England last year despite the Government’s policy changes. Those three examples are all from just one single week; this week and next week there will be more, and together they demonstrate the utter failure of this Government to make decisions that would benefit people and planet and to unleash our abundant renewables, massively upscale energy efficiency installations and work to get us off expensive and volatile gas altogether. Instead, each week we see yet more evidence that this tired and divisive Government are prioritising increasingly desperate attempts to save their own skin over measures that would improve all our lives by ensuring that everyone has a warm and comfortable home to live in, communities have been supported to make the most of the green transition and our one precious and infinitely fragile planet is finally restored.

Protecting and Restoring Nature: COP15 and Beyond

Debate between Barry Gardiner and Caroline Lucas

Thursday 14th July 2022 Commons Chamber

[Barry Gardiner (Brent North) (Lab)]

Does the hon. Member recall that we set out a biodiversity target to halt the decline in nature by 2010, and we set out a target again in 2010 under the Aichi targets to halt the decline in nature loss by 2020, but we achieved neither? Is there anything in the papers in advance of COP15 that gives her any hope that our ability to implement a reverse or even a halt in the decline in nature by 2030 is more likely this time than it was in the previous two decades?

[Caroline Lucas]

I am genuinely struggling to know how to answer the hon. Gentleman’s question. I want to say yes, and in a sense awareness is greater now and the general public’s anger at seeing nature decline before their eyes is perhaps stronger. However, although there are some good words, unless we get rid of all the brackets in the texts and get them agreed, and unless, crucially, we have both the finance and the implementation, with a real focus on putting this stuff into practice, I am afraid I cannot stand here and tell him with any degree of certainty that we will have a better outcome.

I am coming to the end of my comments, as I am sure you will be pleased to hear, Madam Deputy Speaker, but I will touch briefly on the marine environment, because I do not want us to leave that out. I was lucky enough to join Greenpeace as part of its Operation Ocean Witness to see for myself the destructive fishing practices that are still happening, even in our supposed marine protected areas. We came across a French-flagged industrial fly shooter fishing vessel in the Bassurelle Sandbank MPA, and it was shocking to see the destruction in its wake. Fly shooting is hugely damaging not only for our marine ecosystems, but for local fishing communities, including those in my constituency, who are increasingly unable to make ends meet.

Will the Government finally please use their powers under the Fisheries Act 2020 and take action to restore our depleted seas? Will they make all MPAs in UK waters fully protected and immediately restrict the fishing licences of industrial vessels so that they cannot fish in those precious ecosystems?

I also want to underline how crucial it is that we address climate and nature together. They are two sides of the same coin. In Parliament I have championed the climate and ecological emergency Bill, which would address the climate and ecological crises in a holistic way, and I urge the Government to pick up that Bill in this new Session.

Finally, at the core of the climate and ecological crisis is our broken economic model, which prioritises growth above all else, including the health of people and planet. There is a growing body of evidence showing the dangers of our current economic model, with a report from the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services by 82 of the world’s top scientists and experts saying that the

“focus on short-term profits and economic growth”,

often excludes the value of nature.

The Minister will be aware that the Treasury-commissioned Dasgupta review called for an

“urgent and transformative change in how we think, act and measure economic success to protect and enhance our prosperity and the natural world”.

Yet we are still not really seeing what follow-up there will be to the Dasgupta review. Another inquiry by the Environmental Audit Committee on biodiversity in the UK made it clear that

“Alternatives to GDP urgently need to be adopted as more appropriate ways to measure economic success”.

We must now look to build an economy for the future, following countries such as New Zealand, which is already leading the way with the world’s first ever wellbeing budget. The nature of our economy must be on the agenda at COP15 and the Government should join other countries in showing leadership by urgently introducing alternative indicators of economic success that prioritise the health of people and planet.

Much of this debate is around global challenges, but I want to end by focusing on the local and talking about the round-headed rampion, of which I am a proud species champion. The round-headed rampion is a beautiful blue wildflower, which is known as the “Pride of Sussex” and is the official county flower. However, it is increasingly rare, since it grows only on chalk grasslands such as those on the South Downs, and those chalk grasslands have declined by 80% just since world war two. Its fate relies on the protection, preservation and restoration of these important habitats.

Draft EU-Canada Trade Agreement Order

Debate between Barry Gardiner and Caroline Lucas

Tuesday 26th June 2018 Commons Chamber

[Barry Gardiner]

I will come on to our position in due course.

The European Commission hailed CETA, calling it

“the most ambitious trade agreement between countries ever undertaken.”

However, unlike other deals currently being progressed by the European Commission, it is a mixed agreement—trade and investment.

The investment provisions of CETA touch on matters of national competence and, as such, the agreement must be ratified at the national level and the regional level where appropriate. The European Commission and respective national Governments have sought to circumvent this process by provisionally applying CETA since 21 September last year, but the deal has not been ratified and is therefore not yet fully enforceable. To understand why, we need to look at the Wallonian Parliament in Belgium, which refused to ratify the agreement over concerns about investment aspects of it and, in particular, the investor-state dispute settlement mechanism, now known under this agreement as the investment court system. This is where process meets substance. Belgium has referred the matter to the European Court of Justice to seek a ruling on whether the investment court system is even compatible with EU law.

[Caroline Lucas (Brighton, Pavilion) (Green)]

The hon. Gentleman is making a powerful case about a very flawed process. Following public pressure, the provisions in CETA for an investment court system are still only marginally better than the original investor-state dispute settlement system. Does he share my concern that this still amounts to a parallel justice system for large corporations that could render the UK vulnerable to lawsuits, such as that brought by Veolia against Egypt for introducing a minimum wage?

[Barry Gardiner]

I absolutely share the hon. Lady’s concern. That is one reason why it was part of the Labour party’s manifesto at the last election that we would not approve trade agreements that had these mechanisms in them.

EU Referendum: Energy and Environment

Debate between Barry Gardiner and Caroline Lucas

Tuesday 12th July 2016 Commons Chamber

[Barry Gardiner]

What an excellent point my hon. Friend makes. She knows, as I do, that the Secretary of State was someone who saw the value in the UK’s staying in the European Union and in all the directives and regulations that came from Europe, which afforded the sort of environmental protections and energy policies that would secure our future. No doubt the Secretary of State will respond responsibly to today’s brief, but I think she will feel a great deal of sympathy both with the remarks that my hon. Friend has just made and indeed my own remarks from the Dispatch Box.

[Caroline Lucas (Brighton, Pavilion) (Green)]

The hon. Gentleman is making a powerful case about the lack of investment and about economic instability. Does he agree with me that now is a good time for the Government to reverse their decision to privatise the Green Investment Bank, and that when they negotiate withdrawal the Government should make a strong case to remain in the European Investment Bank? If those two things do not happen, we will be in really difficult times.

[Barry Gardiner]

The hon. Lady, whom I regard as an hon. Friend, particularly on these matters, speaks with great knowledge. She is absolutely right about the Green Investment Bank, which was set up for a particular purpose: the Government recognised that there was a market failure. It was quite right of the Government to put the Green Investment Bank in place, but unfortunately the borrowing powers did not come quickly enough, and I think it is a huge mistake now to privatise the bank. It is a matter of deep regret to all who work in this environment. As for the hon. Lady’s remarks about the European Investment Bank, I shall come on to that subject later in my speech.

Energy Generation

Debate between Barry Gardiner and Caroline Lucas

Wednesday 17th April 2013 Westminster Hall

[Barry Gardiner]

My hon. Friend is, as ever, thoroughly astute on these matters. He was a tremendous champion of the decarbonisation target when the Bill was in Committee, and he speaks with great knowledge on the subject. He is absolutely right. Only last night at a dinner, I heard the Secretary of State talking as if this was a great leap forward, that this would be the only Government who had legislated for a decarbonisation target. At that point I almost spluttered into my chicken, because we have not legislated for a decarbonisation target. [Interruption.] And it was beef anyway, says my hon. Friend the Member for Southampton, Test (Dr Whitehead). What we have done is make provision so that, at the appropriate moment, it would not be impossible to legislate.

Let me return to the key point that I wish to address, because I know that other Members want to enter the debate. Although it is good to have a debate and a real exchange of views through interventions, I fear that I must press on if other Members are to be able to speak. Siemens told us that if we wait till 2016 to set a decarbonisation target for 2030, it and many of its competitors are likely to delay or cancel planned investments in the UK.

In March, six of the largest supply chain investors wrote to the Chancellor, the Secretary of State for Business, Innovation and Skills and the Secretary of State for Energy and Climate Change to register their strong support for the decarbonisation amendment tabled by the hon. Member for South Suffolk (Mr Yeo) and me, which to date is supported by 41 Members from—I am pleased to say—all parties in the House. They wrote:

“Projects can take 4-6 years from investment decision to construction and operation. We are already close to the point where lack of a post-2020 market driver will seriously undermine project pipelines. Supply chain investment decisions depend on reasonable assurance for manufacturers that a production facility to be constructed during this decade, costing hundreds of millions of pounds, will have an adequate market for its products well into the 2020s.

Postponing the 2030 target decision until 2016 creates entirely avoidable political risk. This will slow growth in the low carbon sector, handicap the UK supply chain, reduce UK R&D and produce fewer new jobs. This is not in keeping with the Government’s aspirations for the UK to be the global leader in low carbon technologies such as offshore wind and marine.”

The amendment would require a 2030 decarbonisation target for the energy sector to be set by the Secretary of State, on the advice of the Committee on Climate Change, by next spring, which would ensure that the Energy Bill sent a coherent signal to investors. By securing investment in a competitive UK supply chain, the amendment would not only reduce the cost of decarbonising our energy infrastructure, but ensure that the investments that we are committed to make produced a significant growth multiplier and contributed to the essential rebalancing of the British economy.

Recent peer-reviewed studies from the London School of Economics and Berkeley have concluded that the fiscal multiplier for productive infrastructure investment in current economic conditions is likely to be about 2.5 in the UK. The amendment would ensure that the £7.6 billion produced secure investable propositions, creating significant numbers of construction jobs and long-term high-value jobs in communities around the UK, where both are scarce.

[Caroline Lucas]

I of course completely support the hon. Gentleman’s amendment, which he is understandably justifying in terms of economics and, no doubt, political expedients. Will he, however, acknowledge that we should set the targets in line with the science, rather than with what we think is politically possible, because the target of decarbonisation by 2030 gives us only a 37% chance of remaining below 2°, and if someone said that we had only a 37% chance of not falling out of the air, I suspect that we would not get on an aeroplane? The odds are very scary.

[Barry Gardiner]

I am not a gambling man, but I understand the position of seeking to look at climate change policy as a balance of risks, and the hon. Lady is absolutely right to make that point. In truth, whatever the UK does will not make a global difference to whether we reach 2°, as I am sure she would acknowledge. The aspiration required of the UK and the global leadership that it possesses, which the hon. Member for St Ives mentioned, mean that we have to drive this if we are to play our part in achieving the global reduction. I understand the percentage figures she gave, but it is perhaps illegitimate to conclude that if we hit the 2030 target we will have only a 36% chance of achieving the 2° target. The UK cannot achieve that on its own; it demands a similar effort across the globe.

Part of the problem is that, in considering electricity market reform, the Government have been like a phlebotomist looking at the body politic. They have been obsessed with the energy flow around the system, as a phlebotomist is obsessed with the blood flow around the body, but they have failed to consider the health of the whole organism. That makes for a very poor doctor; we would not want a GP who was simply a phlebotomist.

The Government’s approach has not taken enough cognisance of how the energy sector fits in with powering our economy as a whole. A good example is the ramping down of funds available for carbon capture and storage. Coal and CCS will be vital for us. There will be significant jobs, and if we invest in and develop CCS, it will become a major part of our exports in skills and technology around the world, from which we can benefit. It is part of our wider economy, and the same is true of the renewables industry the more we invest in it and adopt the position, as the hon. Gentleman said, of being the global leader.

I am afraid that we have already lost that position, because other countries have invested far more, including what we are prepared to do in CCS. Unless we invest, we will not develop the export capacity that we need to drive our economy as a whole. We cannot simply be what Gary Smith of the GMB often refers to as the Meccano men of Europe, who simply fit together a product made elsewhere. We must have supply chains in the UK, create the jobs and invest in companies here.

Energy Bill [Lords]

Debate between Barry Gardiner and Caroline Lucas

Wednesday 14th September 2011 Commons Chamber

[Barry Gardiner]

The hon. Lady will remember that when the financial services regulations were introduced, banks had to declare up front whether they were providing information and advice to their customers in an independent capacity or as a tied agent for themselves. Does she agree that it is also important in terms of the green deal that people who have gained a householder’s trust and entered their home on the basis that they are providing impartial and independent advice do not, once inside the front door, switch hats and start offering advice as a tied agent of another service provider?

[Caroline Lucas]

I completely agree. Trust is crucial if the green deal is to be successful. We want people to be talking about it, telling their friends and neighbours how great it is; we want there to be a real buzz and momentum behind it. If there are just a couple of cases of such mis-selling, the whole process will be undermined.

I also seek to extend the same consumer protections for the repayment of a green deal loan to energy advice services or energy plans that are not specifically green deal plans. If a householder decides after the initial green deal assessment to pay for the services up front without the need for a green deal loan, they ought to be eligible for the same kinds of protection they would receive if repaying the loan in a different way. If the clause in question is left in its current form, regulations regarding protection and redress will hang not on what a consumer buys, but on how they pay for it. That is perverse. If the consumer pays up front, the protections and regulations will not cover them. Only if they take the green deal loan will they have those protections. If people are not protected until they have signed a contract, how will that help consumers during the advice and contracting stage when they may not have decided to pay for green deal services yet, let alone how to pay for them? Also, who can the consumer complain to about pressurising sales tactics if they walk away before they have signed the contract? Will consumers choose the financial option that is best for them if they have to use green deal finance to get ongoing support from the advice line and redress scheme? I hope the Minister will address those questions in summing up.

My final concern in relation to this group of amendments is about the comparability of green deal quotes. It is vital that consumers are in a position to make an informed choice about which green deal is best for them, and that could be nigh impossible if the different quotes received are hard to compare. I should like the Minister to address this by ensuring that all green deal quotes are provided in a way that makes them very easy to compare with one another, to judge and to assess.

I have detained the House for some time so I shall conclude. My final amendment in this group would give consumers the right to choose which energy bill their green deal loan repayments would be applied to. In 78% of occupied British buildings, heating and hot water are provided by natural gas, so that is the fuel most likely to be reduced after a green deal makeover. It therefore seems logical for customers’ gas bills, where possible, to carry green deal loan repayments because if the golden rule is working, their gas bills will not become more expensive after the green deal repayments have been applied. It is there that the advantage of the green deal will be most apparent to householders.

If the repayments are added to electricity bills, those electricity bills are not likely to fall so much after a green deal makeover unless a home’s space and water are heated by electricity, but far fewer homes are heated by electricity than by gas. That means that in the vast majority of cases, green deal customers will potentially have lower gas bills but higher electricity bills. That makes it harder to see whether the golden rule is working and risks undermining the central pay-as-you-save principle, as well as eroding customers’ confidence in the value of the deal. I hope the Minister will therefore consider allowing consumers to choose which bill they want their green deal payment to be applied to so that their management of the green deal is as straightforward as possible.

[Barry Gardiner]

I am delighted to follow my hon. Friend the Member for Brighton, Pavilion (Caroline Lucas), who has made a very informed speech about exactly the points at the heart of the measures. I, too, want to address the green deal to dig out more about the golden rule and the energy company obligation. We all agree that it is right that energy efficiency improvements should be provided at no up-front cost. That is a good thing that we all support across the House and want to see implemented. As has been pointed out, however, the loans will be provided at commercial rates through the green deal and will attach to the property, not the householder, for up to 25 years.

The golden rule has been introduced to require that all green deal loans are less than the repayment cost resulting from the installation of the measures. The qualifying energy efficiency improvements will be determined through the energy performance certificate. This means that any savings will be estimated and based on standardised use. As a result, there are no guarantees that actual savings will match or better the estimated savings, as I pointed out to the hon. Member for Brigg and Goole (Andrew Percy). The Bill’s central premise is that consumers will save more on their energy bills than they will repay in loan costs and that that will be enough to drive consumer demand. However, the Bill provides little detail about how demand for the green deal will be driven beyond that basic finance mechanism other than through the introduction of the new ECO, which will underpin the deal and subsidise properties that require energy efficiency improvements but for which the golden rule would not be met.

It is estimated that the green deal will reach more than 40 million homes by 2020 and a further 12 million by 2030. That amounts to the retrofitting of 1.7 million homes a year—that is 4,800 a day—between 2012, when the green deal starts, and 2020. The Committee on Climate Change has estimated that, between 2012 and 2022, we would need to insulate 8.3 million lofts, 5.7 million cavity walls and more than 2 million solid walls to meet the UK’s carbon budget. The Government’s expected take-up of those measures, through the green deal and the extension of the carbon emissions reduction target, misses those requirements by 3.8 million lofts and 2.7 million cavity walls.

Although I support the aspiration behind the green deal, it is difficult to see how it can be achieved under the proposals. Indeed, the Committee on Climate Change’s third progress report to Parliament concluded that the Government proposals should help to strengthen incentives for the take-up of energy efficiency measures. However, there is a significant risk that they will not adequately address the range of financial and non-financial barriers. I do not want to talk the measures down because Members on both sides want them to work, but it is important that we are realistic about their likelihood of success.

The economies of energy efficiency retrofits at today’s energy prices simply are not attractive, as my hon. Friend the Member for Brighton, Pavilion has pointed out, because of the gap between projected returns based on current energy prices and the cost of borrowing—a gap that can be met only if substantive subsidies are applied. Recent analysis by E3G has highlighted that at today’s prices and with the commercial interest rates that the Government intend to apply to green deal financing, the golden rule cannot be met on a 25-year loan. The Government have quite rightly identified that the up-front costs of improvement and access to capital are significant barriers to the uptake of energy efficiency, but we should be clear that the green deal alone will not overcome them. Without intervention to limit the cost of borrowing, consumer demand for green deal programmes could be very low indeed.

Furthermore, access to capital is not a universal problem. For those who can afford them, savings, mortgage extensions and personal loans have long been readily available to provide up-front capital for energy efficiency investments, yet they have not been used on any scale, despite the fact that many people are able to procure those borrowings at 5% or 6%, let alone at the 11% that the Government are suggesting. Financing through the green deal simply does not stack up for the rational investor, and particularly for low and middle-income households.

Let me give an example. The annual energy bill for an average household is calculated at £1,029 a year. A good whole-house retrofit would be expected to save approximately 50% on the average energy bill—in this case, just over £500 a year. Solid wall insulation was identified by the Committee on Climate Change as the main energy efficiency measure that could usefully be financed by the green deal, but according to DECC’s own analysis, the capital cost of solid wall insulation ranges between £7,600 and £12,600. Let us take the cost of £12,600 and the maximum saving of £500 a year; in fact, DECC’s analysis estimates that solid wall insulation would save only £400 a year, but I give it the extra £100. Through the green deal, if we pay back £500 a year, through the savings on the energy bill for that average house, against the £12,600 loan over 25 years, we still do not pay back the full amount. That deal fails the golden rule.

An energy company obligation is being introduced to subsidise the difference, reducing up-front costs to the point that they are less than the energy savings. The Committee on Climate Change estimates that up to £17 billion of support will be required through the ECO to insulate 2.3 million solid walls by 2022, but the Government estimate that the total ECO support will be only £1 billion. The fact that the golden rule cannot be met even before the cost of finance is factored in is a matter of huge concern.

The Government have calculated that the green deal’s financial cost will be cheaper than a market personal loan, but they concede that it could mean rates of up to 11%. At today’s energy prices, to drive demand by meeting the green deal’s golden rule, 25-year loans would need to be offered at rates of 2% or less. E3G’s recently published analysis concluded that a £15,000 loan at 0% over 25 years for changes that delivered a 50% energy saving and lifetime savings of £2,461 could meet the golden rule in year 8, but that the same loan offered at just 2% would incur losses of £1,747 over that 25-year period, whereas a similar £15,000 loan for changes that delivered just a 35% energy saving would not break even at all even with interest at 0%.