Green Deal

Ben Wallace Excerpts

Thursday 22nd January 2015 Westminster Hall

[Mr Ben Wallace (Wyre and Preston North) (Con)]

I am delighted to serve under your chairmanship today, Mr Gray, and to be given a run-out as energy Whip on the subject of the green deal. The subject is close to my heart, as I represent a seat up in north Lancashire, where it is often cold. I am used to the cold, but that means that heating houses efficiently and ensuring the best value for money are important to me.

I thank the Energy and Climate Change Committee for giving the Government the opportunity to respond to the report and some of its criticisms and suggestions. I also thank its Chair, my hon. Friend the Member for South Suffolk (Mr Yeo), for presenting those to us today. I read the current and previous reports on the subject, as well as the Government responses to them, and a few things stuck out for me that I would like to address.

The first thing to strike me about the report was that it did not feel as though the Committee disagreed with the concept of the green deal—the idea that Government should try to use incentives and grants to induce millions of people across the country to be more efficient in using energy to heat their homes. The overall policy aim of the green deal has been welcomed so far; a lot of the criticism has been based on the delivery rather than the concept.

I am sure that the Committee understands that the green deal is not just about finance, but I thought one mistake it made in the report was putting front and centre the idea that the green deal is a finance delivery mechanism. The Committee needs to recognise that the individual nature of people’s homes means that there is no silver bullet for or instant way of fixing the problems. Many of the issues identified in the report would affect dozens of Government schemes across the whole policy spectrum and the whole of Whitehall, because of the gap between the theory of a policy and its actual roll-out. No plan of any Government—if Labour is successful at the election and the hon. Member for Sunderland Central (Julie Elliott) is in government next year, she will recognise this—survives delivery in all circumstances. Governments have to adapt to what they see on the ground. The Government have recognised that fact, and in annex A of our response to the Committee’s report we list many of the changes we have made to the green deal as it has developed.

It is also important to realise that in this sector there is always a natural rivalry of priorities between fuel poverty and carbon reduction. That idea came out both in the Committee’s inquiry and as we have rolled our the green deal. However, I am concerned that the Committee focused too much on the green deal as a finance scheme rather than on our overall ambition to reduce carbon emissions and cut energy waste. Paragraph 8 on page 6 of the report opens:

“The Green Deal is a financing mechanism”.

That is perhaps where we disagree most with the observations in the report. The finance is a means to an end. It is about us trying to deliver schemes and mechanisms to make sure that we improve energy efficiency.

We should not forget that private sector finance is a highly mature and competitive work place and area for products. Our scheme will not always be able to provide the best financial offer every day, as doing so depends on circumstances not under our control, such as energy prices and other demands. Over the long term, we are confident that green deal financing will provide the best option, but at certain stages that will not always prove to be the case. We are getting there, though. During the Committee’s inquiry and subsequently, the Green Deal Finance Company has taken quite strong steps to streamline the process, cutting out some additional parts of the application that people felt—and the Committee agreed—had caused delays. That will make a significant difference.

Leaving aside the issues about the finance mechanism, the Committee raised some valid points that the Government need to keep on top of, including communication, behavioural challenges and the complexity of the process. On communication, it is a challenge for all Government schemes to make sure that they match the message to what people are thinking all the time. The good step we took of making sure we put more focus on working alongside local authorities has been a real success, and we have seen an increase in uptake. Councils such as Leeds and Nottinghamshire have started to make a real difference to the roll-out by getting across a strong message that it is in people’s own interests to cut energy bills, use less carbon and heat their houses efficiently.

It is not that easy to get people to change their behaviour. It does not happen overnight; it takes time—indeed, it takes a long time for Governments to change many things. My only message to the Opposition Front-Bench team is that we all go through the manifesto process and make brave statements, but changing the public’s behaviour will always be easier said than done. I am sure that if, this time next year, I am sitting in opposition to the hon. Member for Sunderland Central and asking, “Where is the first roll-out for 75,000-odd homes?” she will quote me back to myself on that point. Things are changing, though, and we are getting to a better place. The more expensive things are now being done. The low-hanging fruit is, to some extent, on track now and we have to get on to dealing with some of the more difficult areas.

We need to look at uptake, which has improved significantly in the past few months and hopefully will go from strength to strength. The demand for green deal plans has more than doubled since the start of 2014, and at the end of October we had a record-breaking week in which 570 plan applications, worth £2.2 million, were made. In comparison, there was an average of 190 applications per week in the first part of 2014. Raising consumers’ awareness of how they can improve their homes is an important foundation of our approach. By December 2014, some 445,800 green deal assessments had been carried out and a large number of people are now aware of what they need to do to improve their home’s energy efficiency. The next challenge is to get them into a plan.

The energy company obligation has been effective and has delivered the majority of the homes improved. We made important changes to the ECO to reduce consumers’ energy bills. We announced a further £540 million to be spent on energy efficiency over three years, and we announced an increase in that figure by £100 million last October. That investment enabled us to establish the successful green deal home improvement fund to incentivise households to install energy efficiency measures through cashback offers. Our green deal communities programme is working with 96 local authorities to get a better understanding of how to deliver efficiency measures on a street-by-street basis and how to integrate home energy efficiency improvements with other aspects of local authority activity.

Stakeholders and the Committee’s reports inform us that we are on the way to seeing better traction for the green deal. I am convinced that the figures prove that we are increasing our roll-out. People get what the green deal is and are able to access the finance they want, so I am confident that, as we go from strength to strength, the green deal will be accepted across the board.

The Committee report contains valuable steers, and I will tell the Under-Secretary of State for Energy and Climate Change, my hon. Friend the Member for Hastings and Rye (Amber Rudd), to take them on board. Those important and valid points were meant in the spirit of constructive criticism, as the Chair of the Committee said, and our response accepts that. We will work to improve our communications and ease of access to enable the green deal to change people’s behaviour across the board.

I do not need to be reminded that there is an election coming up shortly. Energy efficiency is bound to be a high priority for the incoming Government, whatever their political persuasion, because it is the most effective way to reduce carbon emissions and manage our energy demand. It is also good for societies not to waste resources. Whatever the carbon emission challenges are, we must be efficient. The Government have delivered a significant number of improvements to homes, and the innovative ideas to make Government support go further that we have implemented have attracted interest from other countries.

It would be tempting to ask the Labour party to tell the electorate what it is offering, but this debate is about the Committee’s report. However, the electorate must understand that those things will have to be paid for. The Government cannot intervene and encourage people for free, and offering 1 million interest-free loans will cost a lot.

[Julie Elliott]

May I advise the Select Committee that our proposals will not cost a penny more than what the Government are already spending in this area?

[Mr Wallace]

We will have to take the hon. Lady’s statement at face value, but given the previous Government’s track record on managing the economy and their books, I ask only that the electorate look closely at the figures that are produced.

The Opposition should reflect on the difference between roll-out and theory. I remember sometime in 2009 receiving 32 light bulbs at random from my energy supplier, because that was the way it was meeting the rather fudged, bizarre obligations placed on them by the previous Government. I think I still have them—the Labour party can have them back if it wants; it was probably the only contribution it made. We are confident that the green deal will go from strength to strength. The graphs, charts and the uptake show that we are moving in the right direction.