Net Zero by 2050

Ben Lake Excerpts

Monday 16th October 2023 Commons Chamber

[Claire Coutinho]

My hon. Friend is a doughty campaigner for all the industries in her area. Our ambition is to tackle the challenge with the grid. We will be setting out for the first time a geo-spatial plan, looking at planning and looking at all the different connection points to make sure we have an overall strategy for the country, which will immeasurably speed up the connection process.

[Ben Lake (Ceredigion) (PC)]

September’s offshore wind auction failed to attract any successful bids, a result that dealt a severe blow to hopes for a floating offshore wind industry based off the south-west coast of Wales. What reassurances can the Secretary of State offer that lessons will be learnt from that auction process and that action will be taken to ensure that investment in this new exciting industry is secured in future?

[Claire Coutinho]

The hon. Gentleman is right to talk about offshore wind as an exciting industry, which has done incredibly well under our contracts for difference programme. We are looking at floating offshore wind, and he will know the support we have put in place, but I have been speaking to investors and stakeholders and will be making sure that we look at some of the challenges the sector faces.

Energy Infrastructure

Ben Lake Excerpts

Wednesday 5th July 2023 Commons Chamber

[Ben Lake (Ceredigion) (PC)]

It is a pleasure to follow the hon. Member for Peterborough (Paul Bristow). I very much enjoyed his speech and in particular the points he made about the potential of green energy technologies and the green economy for economic development and growth. One of the things that west Wales and Peterborough might have in common is the fact that too many of our young people have to leave to find work when they come to the age of 18. I agree with him that advances and developments in green renewable energy technology offer real economic potential for us and could address that demographic trend that has harmed our communities for many decades.

I commend my neighbour and Chair of the Select Committee, the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) on securing this debate and setting things out so eloquently and impressively. I could just regurgitate the points he made in his speech, such was their quality, but it is important to repeat the fact that Wales has significant renewable energy potential. As he rightly pointed out, if we realised that potential, it would make an important contribution to decarbonisation efforts, as well as creating well-paid jobs and careers in a part of the country that so desperately needs them and enhancing our energy security, the importance of which has been brought into sharp relief in the past year and a half or so.

We have already heard about the potential of different types of energy, and I would like to concentrate on the potential of the Welsh coastline not only for tidal and wave energy, but, as the right hon. Gentleman pointed out, for offshore floating wind. It is an exciting proposal. It is not often we can stand in this place and make a speech based on some optimism and excitement, but it is true: Wales has great potential when it comes to offshore floating wind, and we have a golden opportunity to get first mover advantage in the technology. It is incredibly exciting, not least because of the opportunities it will bring in jobs and careers in south-west Wales. It could also transform the south Wales economy.

As was touched upon earlier, our heritage in Wales, and particularly in south Wales, is of producing energy, albeit in the form of fossil fuels in the past. Industries have been built because of the proximity of some of these energy sources, and I need only mention the steelworks in Port Talbot. Offshore floating wind and the potential associated benefits with hydrogen production offer a real future for green methods of producing essential materials, such as steel in Port Talbot. That would not only bring jobs and new careers to south-west Wales, but could offer a way to safeguard some of the important industries of the future in south Wales and further afield.

It is therefore not surprising that the Welsh Affairs Committee has concentrated in the past two Sessions on this field. As the Chair of the Committee outlined in his opening remarks, we have undertaken a few reports and inquiries and made some recommendations to the Government. I will not list them all, otherwise I would be here all afternoon, but I will bring some important ones to the House’s attention. The Committee called on the UK Government to set targets for floating offshore wind up to 2045. He mentioned that while we need shorter term targets, we also need a clear outline for investors so that they can have certainty in bringing about investment decisions in this new and emerging technology.

We also recommended that the Government uses contracts for difference to guarantee that local areas benefit from the development of these new technologies, and that they provide greater clarity on the timelines for delivery of work on strengthening the grid and commit to significant anticipatory investment, as my hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) mentioned in his remarks. I appreciate that the UK Government have already responded to the reports, but I would be grateful if the Minister touched on some of that work when summing up the debate.

I will take the opportunity to discuss and perhaps counter what appears to be a growing tendency in certain quarters to cast a bit of cold water on the importance and viability of the transition to more green technology. The narrative runs that it is far too expensive and will be an unsustainable burden on household budgets, so we need to de-prioritise it. The Welsh Affairs Committee’s work puts paid to some of those misapprehensions by identifying how green technology can serve as an important economic development tool in areas of the UK that are quite simply in need of levelling up.

Such scepticism about the transition nevertheless offers a useful reminder that it is not enough just to set ambitious targets or a general objective on the transition to renewable energy sources; we also need to ensure that the proceeds of doing so benefit communities in the UK and that they are distributed fairly. Many Members have mentioned that, so I will not go into it in detail, but we do need to ensure that we learn the lessons of the past. We need to be mindful that in previous iterations of offshore wind development, a number of the benefits from skills, jobs and technology were really felt in other countries.

For offshore floating wind, we need to ensure that we benefit from those skilled jobs, expertise and technological advancements in the UK—and ideally in south-west Wales. To achieve that, work is still required to develop more robust supply chains for the manufacture and assembly of the components needed to build these renewable projects. It is not an easy task, and we will not be able to realise it overnight, but the sooner we set some of these plans in motion, the better.

In the south Wales example, that is complicated by how we will need close co-ordination between the Welsh Government, local authorities and the UK Government, but the sooner we sit down and get the plan clear in our minds, the better. We will need those skills by the time that—hopefully—the projects come to be built.

The Chair of the Welsh Affairs Committee also made the point that when the Crown Estate comes to mandating supply-chain requirements for offshore wind developers along the coast of south-west Wales, we must ensure that there is a strong mechanism to hold them to account on some of those commitments. As a number of hon. Members know, Plaid Cymru has long held aspirations to see management of the Crown Estate devolved to Wales. That is a debate in itself, and I will not retread some of that old ground. However, there are some ideas and potential benefits that the UK Government might want to explore further.

It has been argued that management of the Crown Estate in Wales could give the Welsh Government the opportunity to allocate a proportion of the proceeds from leasing and licensing to benefit future generations by way of, in effect, a wealth fund. That is not a novel idea—other countries such as Norway and Qatar have done it in the past for oil and other fossil fuel sources, rather than for renewable energy—but perhaps we could be doing that in the renewables context. I would be keen to hear whether the Minister thinks that has some mileage. A 2008 study by PwC found that the UK could have built up £450 billion had it put tax receipts from oil and gas fields into such a fund from the beginning of the exploitation of gas in the North sea. We could learn a lesson from that and start investing now to create a fund that could serve as a buffer against future economic shocks, which is particularly important given the likely impact of climate change on the world economy in the coming decades.

As I conclude, I would like to raise an idea with the Minister—I aim to be helpful in these debates—about the potential of using rooftops and car parks to generate solar power. Research published earlier this year by University College London found that by 2050 there is scope for up to 117 GW of low-carbon electricity to be generated from roofs and other developed spaces in England alone. To put that in context, that would be a significant contribution when we bear in mind that the UK Government’s target is for 70 GW of solar power by 2035. I would appreciate the Minister touching on that idea and whether the Government’s solar taskforce could consider that.

--- Later in debate ---

[Andrew Bridgen (North West Leicestershire) (Reclaim)]

I draw the Chamber’s attention to my entry in the Register of Member’s Financial Interests: my shareholding in Bridgen Investments, a company that generates considerable volumes of green electricity.

This estimates debate is extremely important, especially considering how lively the debate is in the field of climate science—not reflected in the Chamber today. Given the effects on a population already struggling with energy bills; the growing public awareness of doom-mongers with their deadlines that never actually come to pass; the extreme sacrifices being forced on us all, which may be futile in the face of China, Russia and India continuing to increase their use of fossil fuels enormously, it appears that the Government are taking one side of a scientific argument and, once again, declaring it to be an unchallengeable fact.

The hon. Member for Bath (Wera Hobhouse), who is no longer in her place, is clearly a champion of wind and solar technology. There is a place for those technologies, but the question I wanted to ask her, though she refused my intervention—perhaps the Minister will help her out when summing up—is that on those long, cold winter nights when the wind does not blow, if we rely on solar and wind power, what will keep our houses warm and industry running?

The fact is that the UK accounts for less than 1% of global emissions. On that basis, we are voluntarily rejecting entire established industries that have been proven to work to keep us warm, fed and sheltered. We are asked to reject those for the fantasies of Just Stop Oil protesters and Leonardo DiCaprio-esque climate scientists. We are asked to reject those for technologies that either do not yet exist or have not been proven at scale. The Government cannot prove many of the concepts we have heard about. I seem to remember that for the last 40 years, fusion reactors have always been 20 years away. If I asked the Minister, I think we would find that they are still 20 years away today.

We are asked to reject technologies for those that do not even exist and are not proven at scale. Not only can the Government not explain exactly what technologies we will use, but they cannot give an accurate estimate of what it will cost. According to some estimates, the drive to net zero could cost £1 trillion, or even £3 trillion. If that is on the lower side, £1,000 billion will be slammed on the overdraft of the generations to follow us. I am not sure they will thank us. As with all failed experiments, the only certainty is that when the bill comes in, the people will have to pay.

I am reminded of the beacon—or, more accurately, the white elephant—of Government planning and procurement that is High Speed 2. Here we go again. It appears that the Government are using the same behavioural science tactics relied on recently to sell us a storm in our teacups. We have seen it again and again. The answer is to make it scary and make it soon. We saw it with acid rain, the ozone layer and Al Gore. Voters have seen Government Ministers alongside Greta Thunberg and her five-year prediction that, by now, humanity would have ceased to exist and been wiped out. She has deleted that tweet, by the way.

There is an inconvenient truth, and the net zero legislators are desperate to hide from it. On renewables—solar and wind alone—energy security is so important. It relies on diversity alone. Renewables are not going be able to provide certainty of supply for our homes and our industry of the future.

[Ben Lake]

The hon. Gentleman is making a thought-provoking speech. He makes a point about solar and wind, but does he not accept that other technologies, such as tidal, can offer greater certainty, and the ability for the network and the grid to plan the generation that it can produce?

[Andrew Bridgen]

Yes, we have discussed the benefits of potential tidal energy. We have huge tidal ranges in the UK—some of the largest in the world—but that technology is not here now. It will not keep the lights on when Ratcliffe-on-Soar power station just outside my constituency—the last coal-powered power station in the country—is decommissioned in 18 months. Tidal energy will not be there to take up that slack, unfortunately.

Esteemed colleagues in both Houses have pointed out the current plan is wasteful, damaging and may be ill-thought-out. The only thing certain is that, if we carry on down the legally binding route of net zero that the Government have set for us, our people will become poorer, colder and less free. It is another prime example of, “We know what’s best, we’re going to tell you, and you’re going to get on with it.” People are getting sick of that level of governance.

It is the day after 4 July, and we remember Benjamin Franklin’s words:

“In this world, nothing can be said to be certain except for death and taxes.”

There certainly will be more taxes. He missed out the authoritarian zealots looking to dictate every aspect of our lives. If the last hundred years have taught us anything, it should be that we should always be wary of those who turn down the gas lights and tell us that our suspicions are all in our heads.

Energy Company Obligation Schemes

Ben Lake Excerpts

Tuesday 27th June 2023 Westminster Hall

[Ben Lake (Ceredigion) (PC)]

I beg to move,

That this House has considered the implementation of ECO4 and ECO+.

It is a pleasure to serve under your chairmanship. Mr Paisley. I am grateful for the opportunity to discuss the importance of energy efficiency schemes for domestic properties in general, and more specifically the implementation of the energy company obligation 4 and energy company obligation plus schemes.

As everybody will be aware, households have had to endure wave after wave of challenges to budgets in recent months, with each adding to the financial burden on families and eroding living standards. Although we have recently received welcome news that falling wholesale energy prices will begin to feed through to households, it is unlikely that energy bills will return to pre-crisis levels any time soon.

A frequently cited statistic that bears repeating, lest we allow current prices to be normalised, is that in April 2022 the Welsh Government estimated that energy bills of £1,971 would push 45% of Welsh households into fuel poverty. Next month, when Ofgem’s price cap kicks back in, it will still be marginally higher, at £2,074. The New Economics Foundation suggests that that pressure will continue into next year, with energy bills in April 2024 estimated to be as high as 70% above pre-crisis of 2021 levels. To put it simply, for too many households energy prices will continue to be a significant pressure on their budgets for some time to come. Households will also be more vulnerable this coming winter, after being forced to use savings or take out debt to make it through last winter.

Citizen Advice Cymru has seen an increase in the number of people seeking debt advice, and reports that more people are falling into arrears on essential household bills. The number of people seeking advice on debt relating to energy bills, for example, has more than doubled between May 2021 and May of this year. Although that is not the purpose of today’s debate, it demonstrates why short-term relief with energy bills is still required, including another round of the alternative fuel payment for off-grid households next winter.

In the long term, the energy crisis has thrown into very sharp relief the urgent need to implement measures to bring down energy bills permanently for households and businesses. One solution is to transition to renewable energy sources, another—the focus of today’s debate—is to introduce comprehensive policies to enhance the energy efficiency of the UK’s housing stock.

That issue is particularly acute in Wales, given that we have some of the oldest and least efficient housing stock in western Europe. Data from the Department for Levelling Up, Housing and Communities shows the percentage of dwellings within each local authority with energy performance certificates rated level C or above. The data shows that five out of the 15 local authorities with the smallest percentage of dwellings with EPCs rated level C or above are in Wales, with Gwynedd third from bottom at 23% and my constituency of Ceredigion only slightly better at 25%.

It is perhaps not surprising that Ceredigion does so badly, when we consider that 35% of our homes were constructed in the 19th century. It is sobering to reflect on the fact that the vast majority of the county’s 2050 housing stock has already been built, more than a third of it in the Victorian age. The case for action is, therefore, quite clear and simple. We need to upgrade the energy efficiency of our housing to reduce people’s exposure to increased energy costs. Almost a quarter of tenants in the private rented sector live in fuel poverty, with those living in the least efficient homes spending as much as £950 more per year on their energy bills, compared with homes rated EPC level C.

The UK Government have made the case that it is unsustainable to maintain support indefinitely for households with energy bills. By retrofitting, we can mitigate the need for ongoing and future support packages. Indeed, the New Economics Foundation estimated that had all homes in England and Wales been upgraded to EPC level C by October last year, the energy price guarantee would have cost £3.5 billion less over its first six months and households would have saved an average of £530 over the year.

Of course, retrofitting would also have significant beneficial outcomes for health. We know that living in a cold home can worsen asthma and other respiratory illnesses, and increases the risk of heart disease and cardiac events. It can also worsen musculoskeletal conditions such as arthritis, as well as having a detrimental impact on mental health. Wales’s Future Generations Commissioner estimated that a comprehensive home retrofitting programme could save the Welsh NHS as much as £4.4 billion by 2040 by tackling some of those health issues.

Finally, reducing household energy demand is of course vital for us to improve energy security, reduce our reliance on fossil fuels and, of course, realise our climate targets. A coalition of charities, including Fuel Poverty Action and Green Alliance, have warned that without action on housing and buildings, there is no plausible path to achieving the fifth carbon budget or meeting the 2030 statutory fuel poverty target.

It is clear that home retrofitting is vital and that action taken now will place the UK in a good position in the future. The UK Government’s flagship fuel poverty reduction scheme, the energy company obligation or ECO, has a key role to play in upgrading our homes to permanently reduce the cost of heating for households and to address fuel poverty. ECO has operated since 2013 in several iterations and up to March of this year it had delivered a total of 3.6 million energy efficiency measures in Great Britain. The energy performance improvements that have been delivered have saved low-income customers as much as £17.5 billion in lifetime energy bills and saved the average home some £290.

ECO4 is, of course, the fourth iteration of the scheme. It began in April last year and is planned to run until March 2026. In the past year, however, installations have dropped quite significantly. All versions of ECO have experienced difficulties in some form or other, but ECO4 has undoubtedly been delivering at a slower rate than previous iterations. Energy suppliers and installers are now warning that structural issues are preventing the scheme from fulfilling its potential and I want to dwell on those issues today.

Between April last year, when ECO4 commenced, and March this year, approximately 45,000 households had received support under the scheme. Given that that is around 10% of the 450,000 households that the scheme is supposed to support over its four-year lifetime, there is concern about the pace of the roll-out so far. One reason might be that the number of measures installed per property during the roll-out of ECO4 to date has been much higher than expected, with an average of nearly 3.5 measures per property since April 2022 compared with the average of 1.8 measures expected in the scheme’s final impact assessment. In the first quarter of 2023, the figure increased to an average of 4.93 measures per household.

E.ON Energy estimates that, as result, industry could achieve its overall national bill saving target by delivering ECO4 to only 215,000 properties of the 450,000 targeted. Of course, it is not a bad thing that energy efficiency is being significantly improved for those households supported by ECO4, but it raises a question about the adequacy of the funding in place if ECO4 is to achieve its target of supporting 450,000 households, as I am sure that Members will agree.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

I agree entirely with my hon. Friend, as I am sure that many would, that this is primarily a question of funding. We should take a step back and realise that Shell has directed £5 billion in windfall profits towards its shareholders in the first quarter of this year, so there is surely a good case to be made for an emergency windfall tax to enable additional work for the other households that would benefit so much from it.

[Ben Lake]

I am very grateful to my right hon. Friend for that important intervention and you will be unsurprised, Mr Paisley, to hear that I agree with her that there is an important opportunity to introduce emergency measures. At the end of the day, energy companies are making eye-watering amounts of profit at a time when households across the country are struggling. I think it is very appropriate for us to consider ways of recouping some of that potential income to put against this important measure.

Adjustments are required to get the scheme back on track so it can achieve its full potential. The first adjustment requires the UK Government to look again at ECO4’s cost assumptions. They were finalised in April 2022 and do not reflect current market conditions, including the escalation in costs caused by labour shortages and manufacturing prices. More recent cost assumptions, such as those included in the Great British insulation scheme’s impact assessment, reflect those price increases.

For example, the fixed assumed costs of installing external solid wall insulation, which comprises 12% of measures installed under ECO4 to date, increased from £4,200 in 2021 to about £5,000 in 2022—by almost 20%. Meanwhile, the UK Government estimate that the cost of installing cavity wall insulation for bungalows, as well as detached, semi-detached and end-of-terrace houses, has increased by 50% to 63%. That is all without factoring in the inflationary pressures we have seen in 2023 so far. At the start of 2023, insulation and associated material prices increased significantly, many by close to 10% and some by as much as 35%, compounding similar increases seen last year.

Another aspect of the scheme that requires attention is the minimum requirements threshold, which means that a household’s energy performance certificate must be improved to a particular level. For example, if band D and E homes are to be eligible for the scheme, they have to be upgraded to at least band C, and band F and G homes must be upgraded to at least band D. We should welcome the intent of that requirement. Providing support to the poorest households in the least efficient homes by bringing them up to a significantly higher energy performance rating is an important objective. Nevertheless, the requirement is proving to be a limiting factor on the scheme’s delivery. I have spoken to installers and energy suppliers who say that the minimum requirements are too inflexible compared with previous schemes.

It is suggested that the requirements are making it difficult to find eligible properties, and installers are reporting difficulties in proving how properties in higher EPC bands, such as those in band D, as well as on-gas properties, can meet the requirements. E.ON Energy estimates that around 90% of qualifying fuel-poor households cannot have works delivered to their properties, as either they fail to meet the minimum requirements threshold or it would be economically unviable to upgrade them to the levels required to meet it.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

The hon. Gentleman is giving one of the best speeches I have heard in Westminster Hall in a long time, and he has some good evidence to back up his comments. I congratulate him on securing the debate. My constituency, like his, has a high number of rural homes. Many are reliant on oil-fired central heating and also struggle to fit into the qualifying criteria for the type of scheme that he has outlined. What advice does he have for the Government on how we can improve the flexibility of the schemes to ensure that oil-fired homes can qualify?

[Ben Lake]

The reality is that a very high proportion, if not the majority, of homes in rural constituencies find it difficult to access the scheme because they are not on the mains gas network. In my constituency, some 72% of properties are not connected to mains gas and they are struggling uphill to get on to the scheme. The Government would do well to look again at whether we can change the ECO Flex pathways to allow local authorities greater flexibility to support off-grid properties in particular. That might be a way forward. We certainly need to address the issue. If we do not, I worry that rural areas, which often have an older, less efficient housing stock, will be left behind. I am grateful to the hon. Gentleman for making that important point.

As greater investment is required per property to meet the minimum improvement threshold requirements, the current iteration of the scheme appears to be more exposed, and therefore more vulnerable, to the inflationary pressures that I mentioned earlier, so we need to look again at how it is funded. I ask the UK Government to look at that very carefully.

Another aspect of ECO4 that is welcome in principle, but which is putting pressure on those delivering the scheme, is the Flex pathway. The pathway is important, because it enables local councils to identify low-income households that are in need of support, but that are unlikely to be eligible under the scheme’s standard approach. It also provides an opportunity for local councils to better tailor energy efficiency schemes to their respective areas, and I refer back to the remark from the hon. Member for Central Suffolk and North Ipswich (Dr Poulter) about rural properties. The issue, however, is that local councils feel that the Flex pathway is too onerous and that the information required of them for each application takes up significant staff time and resources. Indeed, I am told that the level of detail required can make the Flex pathway inflexible when considering different local factors.

One of those factors is the nature of the housing stock in an area, and I have already mentioned that Wales has some of the oldest and least efficient housing stock in western Europe. I spoke to representatives of Gwynedd Council, who expressed concerns that the products available via ECO do not always work well with the design of older houses.

[Liz Saville Roberts]

On that point, I would like to mention Meilyr Tomos at Gwynedd Council, who supplied me and others with advice on this debate. In relation to the ECO Flex programme, another issue in Gwynedd is second homes. Younger people are now priced out of staying in their own homes, and more non-dependant children are remaining with their parents—between 2011 and the 2021 census, in Gwynedd the figure increased by 6.8%. Given that non-dependant children artificially inflate household incomes, that has a knock-on effect on ECO Flex. The Government would be wise to give due attention to such rural issues.

[Ben Lake]

I agree with my right hon. Friend. The Flex pathway offers a real opportunity to allow the policy to be tailored to the specific needs of local areas, so as to accelerate the delivery without impacting on the broader scheme that the Government have implemented.

The consequence of rising costs and a perceived inflexibility in the structure of the scheme has been that supply chains are starting to stutter, and I am told that many installers are leaving the market. The Installation Assurance Authority warns that there are now fewer than 10,000 people involved in the industry and public-funded schemes, whereas there were 54,000 in 2012. Those who have moved away from ECO4 are reluctant to return. If installers continue to leave the market at this rate, it will make it very difficult not just to deliver ECO4, but to achieve the level of home retrofitting required to meet our future climate and fuel poverty targets.

If those issues are not addressed, thousands of eligible households will miss out on crucial energy-saving measures, meaning that they will face higher energy bills this winter and beyond. I believe that the Department for Energy Security and Net Zero is consulting on the deliverability of elements of ECO4. If it intends to do so, I ask that they publish the consultation before the summer recess in order to allow sufficient time ahead of April 2024 for industry to adjust accordingly. A failure to do so may mean that even more installers drop out of delivering the scheme due to continued uncertainty.

It is not too late to get ECO4 back on track, and I would argue that a consultation could play a key part in doing so, but I would appreciate it if the Minister could explain what consideration has been or will be given in a consultation to the following points. Could ECO4’s cost assumptions be revised in line with current supply costs to reflect current market conditions? Could the eligibility of homes be widened to ensure that more people can benefit from the scheme? That could include increasing the number of fuel-poor households eligible in the private and social rental sector, or it could mean enabling the Flex channel to be more responsive to local needs in order to be able to capture more fuel-poor households, such as those in receipt of means-tested benefits or with health conditions.

Another suggestion is that we investigate the possibility of extending the buy-out mechanism, so that others besides energy suppliers can take on obligations, and enable local councils to deliver ECO. Other suggestions are: making long-term funding available for training, so that we can boost the supply chain, and considering measures to boost recruitment and careers in the retrofitting energy efficiency industry; ensuring continuous and open engagement with installers, energy suppliers and other industry and fuel poverty experts, to guarantee that the scheme remains on the right track and to ensure that the UK Government can respond effectively to any future issues that arise; and finally, exploring the possibility of expanding the range of technologies that will be considered in scope in future iterations of ECO4 to, for example, water control technologies, which can help bring down the cost of energy used to heat water.

I will briefly touch on ECO+ or, as it is now known, the Great British insulation scheme. I of course welcome the scheme, which is designed to support households in installing single energy efficiency measures in their homes, but again possible adjustments could vastly improve delivery. Can the Minister say what consideration has been given to refining the scheme’s targeting, so that it better helps fuel-poor households? For the majority of the scheme, households are expected to make a financial contribution to the cost of the measures. That will effectively make a large proportion of the scheme inaccessible to the lowest-income households, which cannot afford to make those contributions. In a cost of living crisis, when disposable income is diminishing across the UK, surely the requirement for contributions should be taken out of the scheme, or the percentage of participants who are expected to make contributions should to be lowered.

It would be remiss of me not to mention that I have heard from constituents who were unfortunately let down by contractors delivering measures under the ECO4 scheme. Of course, any measures installed are now covered by the UK Government-endorsed quality scheme, TrustMark. I appreciate that incidents of poor delivery may be isolated examples, but in those worst-case scenarios where delivery goes horribly wrong, the protection and security for households is still inadequate.

[Liz Saville Roberts]

I would be grateful if the Minister addressed the issue of providers who place solar panels on agricultural land, but do not guarantee against damage caused by animals. Obviously, placing panels on agricultural land is very convenient, and it makes access cheaper, although attention is not always paid to planning requirements. However, the convenience may be outweighed by the risk for the householder of damage caused by animals that is not covered by a guarantee. I very much wish the Government to address that rural issue.

[Ben Lake]

I thank my right hon. Friend for raising another important point. It perhaps illustrates the need to strengthen the accountability of the scheme. In Ceredigion, households have had measures installed that were of substandard quality, and they find it almost impossible to get information about redress and holding the installers to account for the sub-par work. Her concerns would be captured by a broader effort to improve the scrutiny and accountability of the scheme. Will the UK Government consider ways of improving oversight of installations? We need a stronger mechanism by which installers can be held to account.

Before closing, I will touch on the need to incentivise those who are ineligible for the ECO scheme to invest in retrofitting—those who might have the means to do so. A few measures come to mind. First, could we look again at removing VAT from insulation products, and not just from the installation of these products, as well as from storage batteries? I appreciate that that might be a Treasury matter. What work might the Government undertake on providing interest-free loans to those who wish to install energy efficiency and low-carbon heating measures? Providing access to such support will be even more important in the face of steep interest rate hikes.

Finally, I come to another area that deserves a brief mention in a discussion on how we can help households to bring down energy bills and expand our renewable capacity: incentivising households to invest in smaller-scale renewables. I have been contacted by several constituents who are concerned that the reduction in support from the feed-in tariffs—and now their replacement, the smart export guarantee—has vastly reduced the incentive to invest. I urge the Government to consider increasing the tariffs that the energy suppliers are required to offer to homeowners who generate renewable energy. I draw my remarks to a close, and very much look forward to the comments of my colleagues.

[Several hon. Members rose—]

--- Later in debate ---

[Ben Lake]

I thank all those who have contributed to the debate; it has been very detailed and useful. As well as some of the practical concerns and challenges, we have discussed some of the broader and deeper tensions within various aspects of the policy, and how changes to one aspect might have a detrimental or unintended impact on another.

I am grateful to all colleagues. I thank the hon. Members for Bath (Wera Hobhouse), for Strangford (Jim Shannon) and for Westmorland and Lonsdale (Tim Farron), who made speeches. I also thank the hon. Member for Coatbridge, Chryston and Bellshill (Steven Bonnar), the hon. Member for Bristol East (Kerry McCarthy) and the Minister, as well as those who made interventions. It has been a good debate with a consensus that this objective is very important, and the policy will deliver a great deal of good for households as they face ever-increasing pressures on their finances.

I have the last word, as it were. I will use it to say that I am pleased that the Government are monitoring the situation, particularly the cost assumptions. That will be broadly welcomed by those who are responsible for installing some of these measures.

Question put and agreed to.

Resolved,

That this House has considered the implementation of ECO4 and ECO+.

Energy Bill [Lords]

Ben Lake Excerpts

2nd reading
Tuesday 9th May 2023 Commons Chamber

[Ben Lake (Ceredigion) (PC)]

It is a pleasure to follow the hon. Member for Banff and Buchan (David Duguid), who was effective in outlining the many complexities inherent in the transition of our energy system from dependence on fossil fuels. It is a complexity that we must bear in mind as we discuss the Bill. I welcome many of the measures in the Bill that are designed to provide a cleaner, more affordable and more secure energy system. However, I am concerned that more is required to address some of the short-term issues that we face.

Of course, I need not remind the House of the widespread concern that households across the UK are particularly vulnerable to any further increases in the cost of energy. We are told that energy bills might increase by some 17% this year. Hon. Members will know as well as I do that many households struggled last winter. They have had to exhaust their savings, and some have had to take out loans to meet the costs of last winter, so they are vulnerable to any further increases that might come next.

Citizens Advice Cymru has seen a sharp increase in the number of people seeking debt advice. It reports that more people are now falling into arrears on essential household bills. The charity saw a 150% increase in the number of people seeking advice on debt relating to energy bills between February 2020 and February this year. That further underlines the vulnerability of so many of our households and how exposed they are to any further increases in the cost of energy. Before I go into some of the Bill’s longer-term measures, I would like to impress on the Government that, before next winter, there is still time to bring forward measures to support some of those vulnerable households and ways of financing them.

[Anne McLaughlin (Glasgow North East) (SNP)]

Does the hon. Member share my concerns, which I think are widespread, about the plight of people on prepayment meters who are struggling to pay for energy? Does he share my disappointment that nothing has yet made it into the Bill that would protect people on prepayment meters in particular from so-called self-disconnection, where, when they run out of money, they are automatically cut off from all gas and electricity?

--- Later in debate ---

[Ben Lake]

I thank my hon. Friend for making that important point. I think we all agree that customers on prepayment meters are among the most vulnerable consumers of energy and electricity in the country, and they should be prioritised as we look to help households with the cost of energy.

It was mentioned earlier that one way of financing greater support for households could be a new tax on share buybacks. We have read in the news about Shell and its £3.2 billion plans announced in that regard, and we must question whether such funding could be used to increase support provided under the energy price guarantee in advance of next winter. Another round of the alternative fuel payment could be guaranteed, set at a level which better reflects the increase in the cost of alternative fuels experienced by off-grid households. In that regard, I am very grateful that the Government and the Minister are considering additional support for energy-intensive businesses not connected to the mains gas grid. That should be a priority.

Looking beyond next winter, I think Members will agree that the Bill offers a golden opportunity to step up investment in the energy efficiency of our housing stock. In the long term, reducing our energy demand represents one of the most important contributions to forging a more resilient and sustainable energy system, helping to permanently slash energy bills for both households and businesses alike. I have previously called for the £6 billion for energy efficiency measures, committed in the autumn statement, to be brought forward. The spending profile should be brought forward as much as possible. The more we can prioritise the investment of energy efficiency, the better. As chair of the all-party parliamentary group on fuel poverty, I emphasise that point and, in doing so, ask that the Government consider setting clearer pathways for improved energy efficiency standards for our housing stock.

The case for prioritising energy efficiency measures is well made, but for the avoidance of any doubt the New Economics Foundation estimates that had all homes in England and Wales been upgraded to EPC C by October last year, the energy price guarantee would have cost £3.5 billion less during its first six months. A Welsh home installation programme, set out by the Future Generations Commissioner for Wales, could save the Welsh NHS £4.4 billion by 2040 in improved health outcomes.

It is important that current energy company obligation schemes are delivered properly. Between April last year, when ECO4 commenced, and December, approximately 25,000 households received support. Given that that amounts to less than 6% of the 450,000 households ECO4 is supposed to support over its four-year lifetime, we should be concerned about the pace of the roll-out so far. Constituents and installers alike have contacted me to complain about the scheme’s deficiencies, which I believe demand the Government’s urgent attention. In particular, consideration needs to be given to reviewing the eligibility criteria, so that more people can benefit from the scheme. Also important is revision of the scheme’s cost assumptions, so they are brought in line with current supply costs.

Before I bring my remarks to a close, I would like to add my support for clauses 272 and 273, which were added to the Bill in the other place. The current energy and wider cost of living crisis brings into sharp focus the consequences of failing to transition away from fossil fuels. Action must be taken to accelerate the transition. In that regard, community energy projects have a crucial role to play. By establishing an export guarantee scheme for smaller-scale sites that generate low-carbon electricity, and by requiring larger suppliers to work with community schemes, the clauses could unlock the potential of community energy schemes across the United Kingdom, which the campaign group Power for People estimates could grow by between 12 and 20 times by 2030, powering up to 2.2 million homes. This is an important set of clauses that I very much hope the Government will see fit to retain in the Bill.

Powering Up Britain

Ben Lake Excerpts

Thursday 30th March 2023 Commons Chamber

[Graham Stuart]

No policy decision has been made in this area. We have consulted and gone out and found ideas about the best way of doing this. My right hon. Friend is right to identify that any system needs to take account of the particularities of certain property types, and we will ensure we do that so that we both align with net zero and align with the reality of existing properties.

[Ben Lake (Ceredigion) (PC)]

I am pleased the statement mentioned the importance of energy efficiency schemes, both for their contribution to our net zero ambitions and the help they can offer households. The New Economics Foundation estimates that had all homes across England and Wales been upgraded to EPC rating C over the past decade, energy bills would on average have been £530 cheaper per household. I take it that the £1 billion allocated for the great British insulation scheme is in addition to the £6 billion committed at the autumn statement for expenditure post-2025. Is the Minister considering ways of bringing forward some of this spending so that even greater progress can be made?

[Graham Stuart]

We would be in a very different and much better situation if, instead of inheriting such a tiny—derisory—number of properly insulated homes when we came into power, we had had the 50% we are at today. With the energy efficiency taskforce and my colleague Lord Callanan, we are bringing industry and other stakeholders together, working with the Welsh Government and others to make sure that we have all the right policies, because the best form of energy is energy we do not use: it is demand that we can remove and destroy. That is the cheapest, and it can help us be a lean and efficient economy, and with fewer people in fuel poverty.