(6 years, 2 months ago)
Commons ChamberI am grateful to my hon. Friend and I agree with her that nuclear should be a part of our energy mix. To be resilient, we should have a diverse energy mix. It is important that the cost of any project should be acceptable and affordable for bill payers as well as taxpayers. That will be an important principle in the negotiations, but if we are successful in that, it will make the contribution my hon. Friend describes.
May I put it on the record that there is not cross-party consensus on nuclear power? My question is about renewables. Investment in renewables is at an all-time low. Funding streams for clean energy are at their lowest level since 2008, despite solar and wind being the cheapest form of new electricity generation. I want to ask the Secretary of State again how he can justify this multimillion deal to prop up an outdated and hugely costly technology. The chief executive of National Grid himself has said that baseload is an outdated concept because the cost of batteries will come down very quickly and that technology will be much cheaper than new nuclear by the time it comes on board. Renewables are much cheaper and safer, and they are ready now. Why does he not choose them?
The hon. Lady has, as she describes, a fundamental disagreement: she does not see any benefit from nuclear to the resilience and supply of our electricity. That has long been her view, but I am surprised that she would talk down our country’s achievements on renewables. She should know that as a result of decisions taken by this Government and our predecessor, we are now the leading nation in the world for the deployment of offshore wind. Taking a strategic approach and investing in the future with a pipeline, just as we propose for new nuclear, has resulted in jobs being created around the towns and cities, in particular the coastal towns, of this country. I would have thought she would recognise and welcome that.
(6 years, 5 months ago)
Commons ChamberThe issue that I should like to raise tonight has arisen in my constituency in recent weeks, but it has national implications. I am also sure that it will be familiar to many Members of this House: namely, the sudden collapse of a private sector business—in this case, a building services company. That collapse has left my constituents out of pocket and in some cases literally out of their home. Understandably, they are angry and frustrated by the response, or more accurately, the lack of it from the relevant state bodies.
DMB Solutions, a Brighton-based building and design company, went into voluntary liquidation over the new year. It had operated in my constituency since about 2009 and, to a slightly lesser extent, in the neighbouring constituencies of the hon. Member for Hove (Peter Kyle), who I am delighted to see in his place, and the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle). The fallout from the collapse of the company has gained national media attention, owing to both the number of people affected and the scale of the financial losses they suffered. More than 400 local people have joined a victim support group on Facebook set up more than a year before the company collapsed—a point to which I will return—while a significant number have lost in excess of £50,000. This was money saved up over years and paid to DMB for work that will now never be completed, or at least not by DMB Solutions.
It has been shocking and heart-breaking to meet my constituents and hear at first hand the devastating situations in which many have been left by the demise of the company. For example, Norma Smith, who is 84 years old, employed DMB Solutions last summer to build a wet room with a toilet in the downstairs of her house in anticipation of one day being unable to use the stairs. In common with many others who have complained to me about DMB Solutions, Norma paid in full before work commenced. She reports that the contract time of three to four weeks for completion stretched into months and months, during which she was confined to living in her bedroom.
Norma eventually cancelled part of the project in a bid to save costs, but that money was never returned to her. Moreover, a leaking pipe caused flooding in her home and damage to floorboards that she had to pay a carpenter to repair. The project was never fully completed by DMB Solutions, and Norma has since had to employ another building company to create a shower space instead of the wet room originally envisaged. She says:
“As the weeks went by with very little work being carried out, downstairs a building site, I become very exhausted. In the end, I had to ask my son-in-law to take on all communication with the company, and with Trading Standards. I do hope that the company will be fully investigated, as the damage, not only in financial terms but also the emotional toll, has been huge.”
The psychological impact of such cases—the stress and anxiety caused, as well as the financial problems—cannot be overestimated.
The hon. Lady is making a powerful point. To add to her catalogue of constituents, I can speak of those who have turned to me, such as Alison, who gave £30,000 to this company six days before it went bust. It knew it would not fulfil the order, yet it took £30,000 from somebody—in the full knowledge that it would not complete the work. Does the hon. Lady not think that in such cases the authorities should investigate fully to ensure that the full force of the law is on the side of people such as Alison, not of the directors, who were clearly ripping her off?
I thank the hon. Gentleman for his intervention, and I agree entirely. It is a point to which I will return shortly. As he says, the company must have known six days before it chose to go into liquidation that it was about to do that. I would have thought that to seek tens of thousands of pounds just days before was criminal—I would have thought it was fraud—but we are having great difficulty prosecuting the case.
I want to share one last story from a constituent who told me:
“My partner and I started a project with DMB Solutions in May last year. The project – to rearrange rooms in the loft extension, and create an extension housing a large open plan family room downstairs – was intended to take four weeks and cost about £95,000. We did some research on the company and were unable to find anything concerning. We had seen several boards outside houses and were impressed by the website and by the promises of the design consultant. However, in early January this year, we found ourselves in the position of having an upstairs with no heating, water or Building Control approval, and a downstairs with holes in the ceilings, unattached electrical cables hanging through ceilings, damage to rooms which were outside the scope of works, and a water system which does not provide enough hot water for a bath. We had paid all the money in accordance with the staged payment plan we had signed, so we are £60,000 out of pocket, and our lovely home has been ruined. These events have rocked me to the core and I still cannot quite believe this awful thing has happened to us. In my opinion, DMB Solutions have acted incompetently, immorally and illegally. What I find so distressing is that various bodies and organisations that exist partly to protect the public in these situations seem to have been ineffectual, enabling the company and Directors to continue to operate.”
Today it is DMB Solutions and Brighton Pavilion; tomorrow it will be another company in Edinburgh, Cardiff or Belfast—this is a problem across the whole United Kingdom. Does the hon. Lady agree that it is essential that subcontractors be able to continue with and be paid for work that has been started and that this be a priority for the liquidators, because sometimes small contractors are able to finish the job for a small price?
The hon. Gentleman has drawn attention to a very important issue. It is not just individual householders who are suffering; many companies are also suffering, and the smaller ones may face bankruptcy as a result of not being paid by the other companies. The ripple effect of these actions extends very far, and of course it is by no means limited to one part of the country. This is happening in all the nations of the United Kingdom.
My constituent went on to say:
“I understand that Trading Standards and the Federation of Master Builders had been aware of complaints about this company for more than a year. I also understand that DMB Solutions owed…half a million pounds in taxes.
How can it be that they were still allowed to be operating, and taking money from new customers for work that it was likely they had no intention of completing satisfactorily? I am sure that had I personally owed a proportional amount of money in taxes, someone in authority would have been having a stern conversation with me about it.”
I think that my constituent was entirely right.
One of the striking features of the many cases brought to my attention is the fact that—as we heard from the hon. Member for Hove—the office of DMB Solutions was sending out invoices to customers for work yet to be undertaken, right up until a few days before the directors of the company called in the liquidators on 29 December. For example, Mandy Stewart, a teacher, contracted with DMB Solutions last summer to do a loft conversion at her home. Her partner’s daughter and granddaughter were moving in with them, and work began in mid-October. The project was never completed. Mandy was left with a partially finished and uninhabitable loft conversion, damage to her neighbour’s roof, and damage to her ceilings and light fittings because a tarpaulin had been badly fitted by DMB’s workers during wet and windy weather.
Having paid some £41,000 to DMB Solutions, Mandy is now faced with finding further funds to have the work completed. She also needs to pay for inspection by a structural surveyor to ensure that what has been done so far is safe, to engage building control representatives to sign off the work and to have scaffolding re-erected because the previous company took theirs down when they had not been paid by DMB Solutions.
Furthermore, on 21 December, Mandy received an invoice for almost £10,000 for the next stage of the project. It was not actually due until January, but the covering e-mail from DMB Solutions stated that it was being sent early because the DMB offices would be closed during the Christmas break. As by then Mandy had serious concerns about the work that had been done, she did not pay, but, as she says,
“it is extremely hard to believe that the DMB directors did not know that the company was insolvent on 21 December 2017, barely four working days before they called in the administrators.”
From the accounts that I have been given, it is clear that Mandy is far from alone in having been invoiced by DMB Solutions for a large sum of money, by email on or about 21 December, when the directors must have known that the company faced imminent insolvency. In fact, it is clear that the company was signing up new customers as late as mid-December. Charlotte Preston paid £11,000 to DMB Solutions for an extension to her home on 15 December, but no work was ever started. Even more disturbingly, it is clear that disgruntled customers of DMB Solutions were reporting serious concerns about the company to trading standards as far back as early 2016.
According to accounts filed with Companies House on 11 December, by the time the company went into liquidation on 2 January this year, it owed no less than £542,000 to HMRC in unpaid VAT. Indeed, it seems that it may have been trading unlawfully for a considerable time before its collapse. One member of the Facebook victim support group, Andrew Painton, first raised concerns with trading standards that DMB Solutions was trading fraudulently, rather than just incompetently, in March 2017, and has done so many times since then. In January this year, Andrew told me:
“To say that the performance of Trading Standards has been lamentable would, in my view, be over praising them. They could have done so much more to protect the customers who became victims of this company during the latter nine months of 2017.”
He continued:
“In the Autumn of 2017, a fellow member of the Facebook victim support group submitted a Freedom of Information request to Trading Standards, and this revealed the escalating number of complaints in recent years about DMB Solutions. This did galvanise Trading Standards into action…but it was too little too late.”
I recognise, of course, that Ministers are not responsible for the collapse of private sector businesses, but I hope that the Minister will be able to help this evening by providing clarity about what my constituents can do. Specifically, they want to know how to try to obtain financial recompense and how to ensure that the directors of DMB Solutions cannot simply walk away from their debts—both to their unfortunate customers and to the taxpayer—and start all over again by forming a new company. I can find no adequate Government guidance on either of those points. If there is no comfort under existing legal frameworks, perhaps the Minister can point me to the changes that would be required to company law, or any other laws, that would allow my constituents to be recompensed for their suffering.
Since December, the local trading standards office has been collecting evidence from those affected by the collapse of DMB Solutions. It has also advised them to make a complaint to the Action Fraud line, which reports to the National Fraud Intelligence Bureau, based in the City of London police service. Trading standards in Brighton also says that it plans to submit a report to the economic crime unit of Sussex police. However, the Action Fraud line appears to focus on cyber-crime, rather than incompetently run or even unlawfully run building companies, and the House of Commons Library has been emphatic in advising me that there is nothing that trading standards will now be able to do for those of my constituents who have lost out as a result of the collapse of DMB Solutions. The Library tells me that the appropriate body, at least in terms of seeking to get the directors of DMB Solutions disqualified from acting as company directors in future—something my constituents are understandably keen to see happen—is the Insolvency Service.
My office has consulted a local lawyer specialising in consumer rights, who similarly suggested that the Insolvency Service, not trading standards, is the appropriate body for my constituents to complain to about DMB Solutions. However, the Insolvency Service phone line no longer exists, and its website has a small amount of hard-to-find information on it, stating that it can carry out a confidential investigation or pass complaints on to another public body if they are serious enough, and that if it finds anything wrong and has enough evidence it might ask a court to close a company down or disqualify the company’s directors. It might also carry out a criminal investigation if it finds the company has committed an offence.
However, Andrew Painton of the Facebook victim support group tells me that he has twice complained to the Insolvency Service about DMB Solutions, but on each occasion received only a standard response saying that the service was not considering an investigation against the company. Moreover, the Insolvency Service advises that if a company has already gone into administration, into receivership or is being liquidated, complaints need to be directed to the official receiver or insolvency practitioner. I have emailed them myself, but to date have not had a response.
Trading standards—which appears to have done nothing when it had the chance to do so—is now acting as if it is responsible. It is doing so in concert with Action Fraud and the National Fraud Intelligence Bureau, which does not appear to me to have any obvious role in such a situation. My constituents are confused and they need clarity about who is responsible for ensuring enforcement of the law against the directors of DMB Solutions. In short, it is all about as clear as mud.
While I do not, of course, expect the Minister to accept any responsibility for the collapse of DMB Solutions, I do hope he will be able to set out, clearly and authoritatively, which public body or bodies are now responsible for gathering evidence from my constituents and considering what action needs to be taken against the directors of the company. I would also like to know whether the Minister agrees that the Department should do more to ensure that members of the public have access to reliable, accurate information when such problems arise. People need to know which body to turn to, and what they can expect that body to do, first, when they experience such shockingly poor service by a private sector business—as numerous customers of DMB Solutions clearly did for at least a year before the company collapsed—and, secondly, when, as in this case, a business goes into liquidation and the directors apparently disappear.
More particularly, on behalf of my constituents, I would like the Minister to answer the following questions. If the Insolvency Service is responsible, is it good enough to have a few sparse paragraphs of so-called guidance for members of the public hidden away on a corner of its website? I do not think it is. Could there not be a single, well signposted and advertised point of contact—a one-stop shop—for members of the public who fall victim to the poor business practices and eventual collapse of a limited company like DMB Solutions? Is there perhaps a role for the Citizens Advice consumer helpline here? Currently, the helpline appears to refer only to trading standards, but what if trading standards is not the appropriate enforcement body, as we have been told it is not in this case? Could the appropriate enforcement body, whichever it is, be facilitated and resourced to take a more proactive approach to ensuring that, in such a situation, directors of a failed company are disqualified from acting as directors in future if there are grounds for such disqualification?
I appreciate that there are a number of questions, but I greatly look forward to hearing the Minister’s response, not least because many families and individuals in my constituency are depending on it.
I call the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Watford (Richard Harrington) to respond to the debate.
I hope that the hon. Gentleman will bear with me. I do not want to run out of time without having tried properly to answer all the questions. If there is time left at the end, I will be delighted to give way to him.
I am aware that complaints have been made to trading standards, and we will have to wait for that authority to reach its conclusions. In the meantime, however, we are not sitting idly by. All traders are subject to consumer protection regulations which, for example, require them to provide clear and full information and allow consumers to unwind a contract if they have been the victim of a misleading commercial practice. It is right that any alleged breaches of those regulations should in the first instance be reported to trading standards.
I will set out how the regime impacts on creditors. The first thing to say is that directors who do not play by the rules can expect to be held accountable. It is a long-established principle of company law that directors must act in the best interests of their company, but once the company approaches insolvency, their first duty must be to the creditors. I note from the hon. Members’ comments that, in this case, some of the money was paid a few days before insolvency. Without speaking specifically about this firm, I can say that that is highly relevant to the possible actions open to the authorities. I will say more about that in a moment.
In the majority of company insolvencies, the law is obeyed. Once it has been established that the company cannot pay its debts, a responsible director should take steps to protect creditors, and if a solution to the problem cannot be found, the company may enter into formal insolvency proceedings.
However, not all directors are that diligent. Sometimes, they bury their heads in the sand and continue to run the company as if nothing has happened, or they try to use money owed to creditors as working capital, so that the company may continue to operate, and pay their own salaries. In those few cases, the position of creditors, such as customers who have paid for work in advance, may deteriorate, which would seem to be the case here, given what we have been told. Such directors may be subject to disqualification proceedings, which if successful will prevent them from acting as a director of a company, whether formally appointed or not, for a period of between two and 15 years.
The Government are responsible for disqualification of unfit directors via the Insolvency Service, which assesses insolvent company cases to decide whether to investigate the conduct of the directors and, where appropriate, seek disqualification orders. A person who acts as a director while disqualified is committing a criminal offence and, further, they are personally liable for any debts of a company incurred while they were breaching the disqualification.
The people who have been affected have already contacted the Insolvency Service, which has said that it will not investigate, so where do they go now?
At this juncture, the hon. Lady and her constituents have to accept that this is the beginning of the proceedings.
An investigation may lead to evidence of criminal offences committed by directors, such as fraud. In those cases, directors may face prosecution as well as disqualification proceedings. All that will usually start—this is the relevant point—with the receipt of a report on the conduct of the directors of an insolvent company, which must be submitted by the liquidator within three months of their appointment. Having said that, in deciding whether there should be an investigation, all sources of information will be considered, including information from creditors of the company, its customers, its records and other agencies. If the hon. Lady’s constituents have information about the conduct of the directors of DMB—it appears that they certainly do—that they feel would help to decide whether there should be further investigation, they may, and should, submit it to the Insolvency Service, which has a link on its website for precisely that purpose.
Rogue directors will also discover that they may be personally liable for a company’s debts if it traded while they knew, or ought to have known, that it was insolvent and creditors suffered as a result. While I cannot comment on this particular case, if the circumstances that the hon. Lady described are correct—I have every reason to believe that they are because they are based on what her constituents have told her—the firm was trading when the directors knew or ought to have known that the company was insolvent, and creditors have suffered. A court can order that they repay money to the company out of their own pockets if it can be shown that their actions, or inaction, have harmed creditors. In this situation, the directors would have breached their duty to the creditors of the company, which has the serious effect of preventing the directors from hiding behind the normal veil of incorporation that is a limited company.
I am going to run out of time, so I will continue. I ought to emphasise again at this point that I cannot comment specifically on the case of DMB or indeed the conduct of its directors.
I mentioned earlier that the Government continue to look for ways to strengthen regulatory and enforcement systems, and disqualification is one area where there have been recent improvements. From 2015, the powers of the Insolvency Service to investigate have been expanded, and the system for liquidators reporting on the conduct of the directors has been modernised, allowing for quicker and more efficient investigations. In addition, there is a new process whereby if a director is disqualified, and it can be shown that their actions caused direct losses to creditors, the court can order that they make a payment from their own pocket to compensate creditors or the estate. These compensation orders were introduced in the Small Business, Enterprise and Employment Act 2015.
The insolvency of a construction company such as DMB may often result in some customers having paid for work that it was not possible to complete. It is not unusual to ask the customer for a proportion of the payment up front, such as in the circumstances described by hon. Members tonight. Those circumstances may be different from insolvencies that may happen when directors behave perfectly properly and get into financial difficulties, but I will not describe that as the “normal” way, because few companies do become insolvent. There are things that become a serious matter of misconduct on the part of directors and that lead to periods of disqualification, personal liability and possibly prosecution proceedings being sought.
Apparently, we have a couple more minutes. The Minister says there is provision to get a court to order a pay-out from people’s own pockets. Does that still apply if it was a limited company?
That is not currently the situation. As the hon. Gentleman will know, some creditors are protected above others, such as banks with mortgages, and we have to be careful that companies can legitimately borrow money and pay their taxes.
The hon. Member for Hove (Peter Kyle) and I would be grateful for the meeting the Minister describes. We will follow up with his office.
I apologise for the fact that in some cases I may not have been able to answer as fully as I had hoped.
Question put and agreed to.
(6 years, 9 months ago)
Commons ChamberMy hon. Friend makes a good point: we are only as good as the partners that we are working with. Other countries, including India and China, have set progressive goals for their own countries involving very rapid decarbonisation. Paris remains fit for purpose and will not be renegotiated. We would like all countries, particularly the major OECD countries, to change their minds and get behind this groundbreaking agreement for the world.
The Committee on Climate Change clearly states that fracking cannot be compatible with the UK’s climate change targets unless three key tests—on methane gas, on gas consumption and on carbon budgets—are met. Given that the Government have not shown that those tests can be met, will the Minister’s Department refuse consent for fracking in Ryedale, North Yorkshire, which is currently under consideration, or is she planning simply to ignore the advice from the Committee on Climate Change?
We cannot comment on particular cases. Testing wells are being drilled at the moment, and we need to understand the scientific basis, so that we can prove or disprove these tests. I find it slightly odd that those who argue the loudest that people should accept the scientific basis for climate change refuse to have a conversation about the scientific basis that would prove or disprove the case for fracking.
(7 years, 5 months ago)
Commons ChamberI agree with my hon. Friend. We all know from our constituents about the stress that is caused by anxiety about fuel. I represent a relatively affluent constituency in London, but the statistics show that 8% of my constituents qualify as fuel-poor. This issue affects constituencies across the country. I certainly give my hon. Friend that assurance, and I hope that he will be very satisfied by the material in the consumer Green Paper that will be published imminently.
Recognising that improving household energy efficiency is the most sustainable long-term solution to tackling fuel poverty, we are not complacent, and we are going further to take action. Today, the Electricity and Gas (Energy Company Obligation) (Amendment) Order is being debated in the House of Lords. It will extend the scheme from 1 April 2017 to 30 September 2018. Should the scheme proceed as planned, we expect more than 500,000 homes to be improved over the coming 18 months. The order will also reform the energy company obligation so that 70% of the support available under it will be directed at low-income homes. That represents a real-terms increase from £310 million to £450 million per year, which will be invested in improving the energy efficiency of homes that most need support.
I have no doubt about the Minister’s personal commitment to this agenda, but I wonder why the Government will not make energy efficiency into a national infrastructure priority. Why is energy efficiency not part of the national infrastructure assessment? That would be the way to scale up and meet the ambition he claims the Government have.
It is not a claim about ambition; the ambition is set out in long-term statutory targets. The figures I have given show that these are substantial investments. As I will come on to clarify, there is some £770 million of support for low-income and vulnerable consumers in the financial year 2017-18, so there is no shortage of ambition or of investment. The hon. Lady and I share a strong belief in the importance of energy efficiency. I am trying to stress that what we are doing will increasingly focus on the most vulnerable, and, with public finances constrained, that must be the right priority.
I could not agree more with my hon. Friend. As I have said, previously, he is one of the most thoughtful Members of the House on this subject. He will know that we are on the cusp of something very interesting in our relationship with energy and our ability to manage it more intelligently. Such an opportunity must be just as much available to well-to-do people as it is to those struggling with their bills, and that must be a priority for us. That is partly why I stressed the point that the reforms we are making to the existing policy instruments will increasingly focus on the most vulnerable and the poorest in our communities.
However important it is to improve the energy efficiency of people’s homes, it will inevitably take time, and Government recognise that people also need immediate support with energy bills. We therefore have in place the second pillar of the strategy, the warm home discount. This scheme now provides over 2 million low-income and vulnerable households with a £140 rebate off their energy bill each winter, when temperatures are lowest and bills are highest.
Together the schemes mean that, as I have said, there will be at least £770 million of support for low-income and vulnerable consumers during the financial year 2017-18. This is a significant level of support for households across the country. Other policies will also make a contribution, such as the prepayment safeguard tariff, which I hope the House welcomes, and the roll-out of smart meters. Smart meters are regularly debated in this place, and the evidence is already showing the consumer popularity of this technology and its ability to help people save money and manage their energy use in a smarter way.
Making progress cannot be just about subsidy; regulation will play an important role as we take action to ensure that tenants can live in a home that keeps them comfortably warm. The private rented sector regulations will target the least efficient F and G-rated properties from 2018 by requiring landlords to improve those properties to at least a band E, unless a valid exemption applies. The Department is currently considering options for the implementation of the regulations, with a view to ensuring that they can be implemented effectively by April 2018.
Of course, there is more work to be done. One key area will be to improve targeting on the households most in need. The Digital Economy Bill, which is currently going through Parliament, will be important in that regard, as it will make available better data on householders and properties. We believe that that will in turn reduce the costs that energy suppliers face in identifying the households most in need, and allow more measures to be installed for the same cost.
The actions I have described are all led by the Government. However, fuel poverty is a problem for all of society, and the Government cannot tackle it alone. That is why partnership is a key theme of the fuel poverty strategy. It is important for the Government to play a leadership role, but also to work in partnership with local government, businesses and the charitable sector. Only by making the most of the varied skills and resources of each of those partners will we, collaboratively, be able to tackle fuel poverty.
According to the Government’s own statistics, the EU ecodesign directive has helped households, small businesses and industry to save thousands on the cost of energy. Indeed, the average annual saving from ecodesign policies for homes is expected to be £153 by 2020, which is 20% of the average annual energy bill. Will the Minister assure us that such rules on energy efficiency will continue to be implemented and updated both during and after our renegotiation with the EU?
I certainly agree with the hon. Lady about the importance of good design. In fact, some of the most important progress we have made as a country on energy efficiency has been through building regulations and standards for the quality of our homes and offices. The Government remain ambitious in that respect, and she will know how important that is. She will know that I obviously cannot at this stage clarify our intentions post-Brexit, because that is tied up in a series of wider issues, but I hope I can reassure her that we understand completely the importance of continued ambition in this area. We are very clear that there remains considerable scope for harnessing creativity and innovation in using design to improve standards, which will in turn reduce costs.
I will gently move the hon. Lady back to energy efficiency. She is making a very compelling public health case for the need to tackle energy efficiency and fuel poverty. Does she share my frustration that the national infrastructure assessment is a golden opportunity with respect to putting energy efficiency front and centre in the Government’s low carbon green strategy and industrial strategy? They should do that, because it could help to sort out not only the health crisis, but the climate crisis.
I completely agree with the hon. Lady. I share her frustrations and I will come on to that point shortly.
Looking at the efficacy of the Government’s fuel poverty initiatives thus far, they made a manifesto commitment to install one low-cost insulation measure in 1 million homes over the five years of the parliamentary term. That is welcome, but I suggest the Government need to be far more ambitious. Labour, for example, delivered 2.5 million insulation measures installed in homes in just one single year.
Turning to the funding through the warm home discount, whereby money is given as relief to bill payers, this is commendable and it should certainly continue, but it is physically insulating homes themselves that will provide the long-term solution. On the energy company obligation, the main mechanism by which the Government take action on fuel poverty, it has a clear pathway only to next year. There is currently no clear indication of what will happen to the obligation after 2018 and the Government’s consultation on its future has not been forthcoming. I would be grateful if the Minister provided in this debate an update on progress on that area.
The Minister will be absolutely distraught to hear that the UK ranked 14 out of 16 western European countries for fuel poverty, and ranked bottom for the proportion of people who cannot afford to adequately heat their home. I think he would probably agree that this is not a brilliant record for the country with the fifth-largest economy in the world. A helpful comparison to draw is Sweden, where incomes are similar to the UK’s but winters are much colder and gas is more expensive. One might think that Sweden would have a significant fuel poverty problem that far outstripped that of the UK, which by comparison has mild winters, but levels of fuel poverty in Sweden are approximately half those found in the UK. The major difference is that Swedish homes are properly insulated. A typical Swedish wall is three times more energy efficient. A commitment to that kind of innovation, along with providing the necessary funding, will truly tackle fuel poverty.
The Labour party is keen to make that commitment as part of its industrial strategy to end social injustice and to build a world-leading UK-based renewables and energy efficiency sector with UK-based supply chains. Labour agrees with the NEA, and the hon. Member for Brighton, Pavilion (Caroline Lucas), which states that the National Infrastructure Commission and the UK Government must act on the strong case for domestic energy efficiency to be regarded as a hugely important infrastructure priority. The Minister might wish to outline the Government’s position on that and whether he agrees with Labour.
Economic analysis by the well-regarded Frontier Economics suggests that the net present value of investing in insulating homes could be as valuable as the HS2 project. Cambridge Econometrics found that for each pound spent on insulating homes £1.12 is generated for the Treasury and £3 for the economy in GDP, and 42 pence is saved by the NHS. It is clear that investing in insulation has a positive effect not just for those in fuel poverty or for climate change, but for the wider economy. Unfortunately, however, the fact is that if we compare major insulation measures being installed today to 10 years ago under the previous Labour Government, there has been a huge 88% fall. Put another way, the long-term solution to fuel poverty gets 12% of the support that it originally received.
The fuel poor, by definition, are not in a place to insulate their own homes. It is therefore incumbent on the Government to step in. It is also important for the Government to recognise the wider benefits a real fuel efficiency infrastructure plan would have for all income groups, industry and the wider economy. A little more support from the Government, both to those affected by fuel poverty and to industries waiting to blossom in the renewables sector, could unleash untold economic and social benefits.
To conclude, the Government’s intentions, and those of Ministers, might be good, but there is still a mountain of work to be done. The Labour party is open to working across the House to end fuel poverty for all our constituents. I do hope the Minster has listened to my concerns and will respond accordingly.
I had not intended to speak today because I thought this was going to be a packed debate; that was my misjudgment. This is a crucial debate, however, and I want to add a few words. One of the frustrations that many of us feel is that tackling fuel poverty by investing in energy efficiency can really be a win-win situation in getting people’s fuel bills down, tackling climate change and creating jobs. The creation of those jobs has led to the conclusion that by investing in tackling energy efficiency problems we can actually raise more money than we need to invest. That was rightly mentioned by the hon. Member for Salford and Eccles (Rebecca Long Bailey).
Evidence shows that £3 can be returned to the economy for every £1 invested by central Government, so when the Government say that they cannot afford to invest more in this agenda, it is only right for us to point out that, if the agenda were tackled properly, it could save them money as well as having very real impacts such as reducing the serious harm being done to so many in our communities and preventing premature deaths. So, given that there are so few win-wins in politics, it seems particularly perverse that the Government are turning their back on this one. Taking action in this way would help to ensure that the 2.3 million families living in fuel poverty across the UK had some kind of hope for the future.
We have heard from several hon. Members that fuel poverty is not just an inconvenience; it is nothing less than a national crisis. Forgive me for referencing this for, I think, a third time, but this is so frustrating because we know that we need to scale up investment in energy efficiency, and the national infrastructure process would have been an obvious way to do that. It would be a way to channel funding into this incredibly important area, which otherwise risks being overlooked in many ways.
I want to mention the Committee on Climate Change, whose report last week made it clear that improving energy efficiency through better insulating our homes is key to meeting our climate targets. In that respect, will the Minister give us an indication of when the severely delayed clean growth plan will be published and whether it will include a comprehensive energy efficiency plan, including a statutory commitment to ensuring that all fuel-poor homes have an energy performance rating of at least C by 2030 at the latest?
With one in 10 households living in fuel poverty, it is also a matter of concern that the Government have no scheme for comprehensively insulating fuel-poor homes in England. Meanwhile, the changes being made to the energy company obligation are likely to decrease the support available to fuel-poor households, with those on low incomes unable to replace inefficient gas boilers, for example. We know that 9,000 excess deaths were linked to fuel poverty last winter, and if we are to take seriously the claims being made about the Government’s commitment to this issue, we need to know when they will put in place the kind of actions that are needed.
Finally, I want to say a little bit about how people can, to coin a phrase, take back control. That phrase has been used a lot in recent months, and if there is one area of our lives where we should be taking back control, it is in relation to energy. Right now, our energy system is in the hands of the big six, and for ordinary consumers, it can feel very hard to have any kind of leverage. We are always told that we simply have to switch our power supplier, but again, that puts responsibility on the consumer and we are still at the mercy of whatever the different energy companies come up with.
Instead of having the big six, we should have 60,000. We should do what Germany is doing and have real community energy, not just as a nice-to-have extra bit of luxury but as the bread and butter of our energy system. If we were to do that, we could really give people more control over energy. We could ensure that the huge energy companies were not siphoning off big profits and that investment was going back into the community. We would need to ensure priority access to the grid for community renewables, and a community right of first use—at wholesale, not retail, prices—of the energy generated. We would also need a planning framework that was able to determine locally the degree of community ownership required as a precondition of permitted development, and a right to acquire or own the local distribution network and to sell long consumption—in other words, demand reduction—alongside demand management and renewable energy. I can also imagine a role for the Green Investment Bank, if it was still properly in our hands rather than being flogged off to Macquarie, as seems likely to happen.
We have heard a lot today about the importance of tackling fuel poverty, and that is exactly right. We have also heard a lot about the impact of fuel poverty on our constituents. If we were to take a slightly bolder view, we could solve fuel poverty at the same time as bringing energy properly back into community hands—into the hands of us all—and that is a vision worth fighting for.
Mr Deputy Speaker, I had until recently hoped to be greeting your female colleague—Madam Deputy Speaker—as you and I have spent so much time in the Chamber over the past few days. In her absence, it is a delight to welcome you to the Chair.
I thank colleagues on both sides of the House for their contributions to this debate. I will respond to some of their many points but, first, I will recap the situation. The most recent statistics, as highlighted by my hon. Friend the Minister for Climate Change and Industry in his opening remarks, show that there were approximately 780,000 fewer homes in the lowest energy efficiency rating bands—E, F and G—in 2014 compared with 2010, which demonstrates real, sustainable progress towards the 2020 and 2025 milestones. It is clear from the statistics that the fuel poverty milestones and target are backloaded and that the scale of improvements required to reach each of the target dates increases over time.
Today, the energy company obligation regulations are being debated in the House of Lords. They seek to increase the proportion of support directed at low-income homes. Although the ECO policy has reduced in size compared with the scale of recent years, support for low-income households has been protected. In fact, the regulations for the new scheme to launch on 1 April 2017 represent an increase from £310 million to £450 million a year.
Combined with immediate support on the cost of energy bills provided via the warm home discount, there will be at least £770 million of support for low-income and vulnerable consumers over 2017-18. That is a significant commitment towards some of the households that are faced with the challenge of keeping their home warm. It is therefore far from true that, as the hon. Member for Brighton, Pavilion (Caroline Lucas) said, the Government are turning their back on the situation. Quite the opposite.
The shadow Minister, the hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss), criticised what she described as the Government’s “quite abysmal” record. I can do no better than to point out that, in the years from 2003 to 2010, the last Labour Government succeeded in increasing the number of fuel-poor households from 2.41 million to 2.49 million. The result of what she regards as an effective energy policy was to increase the number of people in fuel poverty.
Regulation, particularly for landlords, will also play an important role in making progress towards the milestones, as will other actions such as the safeguard tariff for pre-payment meters and the roll out of smart meters. In the longer term, the Government will be assessing the resources and policy mix required to meet the 2030 fuel poverty target. However, flexibility is important given the long-term, structural nature of fuel poverty. We should not, in 2017, seek to say precisely how best we can meet the target or commit future Governments to 13 years of spending in a particular way given that so much could change in the energy sector and in applicable technologies.
On the Government’s commitment to this agenda, can the Minister answer the fact that the notional annual spend on the overall ECO programme has reduced from an original £1.3 billion to £640 million? The new cap on heating measures with the ECO leaves a big gap in provision for low-income or vulnerable consumers who cannot now afford to repair or replace existing gas boilers. What is his answer to that?
If the hon. Lady had attended closely to my opening remarks, she would have heard me acknowledge that the scheme has been reduced in size but that funding for more vulnerable groups has been increased. If we combine that with the wider support through the warm home discount, let alone the national living wage and other applicable measures, we see that the Government are doing a great deal in that area.
(7 years, 7 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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I am happy to support my hon. Friend on that point. I also note the valuable work he is doing around Scottish limited partnerships. I hope he has great success in that.
The limited liability partnerships used to date by the GIB may indeed be UK-domiciled and registered for tax purposes, but the point is—we cannot forget this—that if the underlying funds or owners are controlled offshore, the UK taxpayer loses the benefit of that tax take. What level of UK control and benefit will there be after sale? What will be UK-based in the wider supply chain? To what extent will the project management and/or technical experience be based in and benefit the UK?
I congratulate the hon. Lady on securing this important debate. In the context of Brexit, and the very likely loss of funding from the European Investment Bank, would she agree that now it makes less sense than ever to be selling off the Green Investment Bank, because it is precisely that kind of bank that can give us the additional benefit of full UK control and fill the gap that will be left by the likely loss of EIB funding?
I am extremely happy to acknowledge that point, and I agree; I suspect the hon. Lady may have read the next section of my speech. She has absolutely hit the nail on the head.
I was discussing what reinvestment would be made in the UK economy after any asset sales. How much influence fundamentally would the so-called golden share have if much of the activity is controlled outwith the UK? I am not expecting the Minister to answer all those questions, but they are part of wider consideration of what we are doing when we invest our UK taxpayers’ precious money and build the bank, then sell it without looking under the covers at what is happening as part of the commercial process.
Finally, on the preferred bidder, there are justifiable concerns about the company’s intentions. Concerns have been raised about its approach to refinancing and debt, particularly in former public companies such as Thames Water. Jonathan Maxwell, the chief executive of Sustainable Development Capital, makes a case for his consortium, which includes the state-backed Pension Protection Fund, as the best alternative to meet the Government’s goals for the GIB. Would that be a better fit for our wider concerns about the green agenda and to encourage the growth of green, particularly in the light of the threat that Brexit poses to the wider economy?
The UK Government have used a smokescreen of commercial confidentiality, so that proper scrutiny by this Parliament cannot take place. However, it is the UK taxpayer who provided the capital to set up the bank and who could lose out in a sale, without proper scrutiny. We, the UK taxpayers, currently own the GIB and we, the hon. Members from across the House who represent our constituencies, need to assure ourselves that the sale represents real value at present.
The concerns were succinctly summed up by Nils Pratley, writing for The Guardian:
“But what if Macquarie thinks GIB is worth more dead than alive? What if it pays £2bn for GIB, liquidates most of the assets at a handsome profit and then decides the capital is better deployed elsewhere?”
What assessment has the Minister made of a sale making it more likely for the UK to meet its Paris climate change obligations? If he has made that assessment, will he make it available?
It is a pleasure to serve under your chairmanship, Mr Owen. I thank the hon. Member for Edinburgh West (Michelle Thomson) for securing this important debate. Like her, I am deeply concerned by the way in which the Government are proposing to sell off the Green Investment Bank. It is widely known that the Government’s preferred bidder is the Australia-based firm Macquarie. As has now been well documented, there are serious concerns about Macquarie’s corporate record and its commitment to the GIB’s environmental goals.
Macquarie has admitted rigging the Malaysian foreign exchange markets. It has settled charges in the US for violating underwriting laws related to a China-based coal company. It is currently facing legal action in the US for rigging Australian interest rates. In a separate investigation, it was found to have breached market integrity rules in Australia and to have “systemic deficiencies” in its compliance with financial services laws. Closer to home, its ownership of Thames Water has also been deeply controversial, with £10 billion of offshore debt loaded on the company and a £250 million pension deficit allowed to accumulate while profits were extracted.
Macquarie also has an appalling environmental record, funding fossil fuel extraction projects across the world. From open-cast coal mines in China to fracking here in the UK, it has a track record of supporting climate-wrecking projects. By any measure, Macquarie is unfit to be custodian of the UK Green Investment Bank; if anything, there is a very clear risk that it will destroy it.
The Government have so far refused to respond to those concerns. Instead, we see ample evidence that the Government are not only willing to allow an asset strip, but may have actually helped to facilitate it. With the support of Treasury-owned UK Government investment, 11 subsidiary companies of the GIB were set up presumably to allow Macquarie to asset-strip the UK’s Green Investment Bank. The Minister passed on the opportunity to deny Macquarie’s involvement in those changes in response to a written question I tabled last week.
Meanwhile, the Government continue to point to the creation of a special share as the answer to all our concerns. That is simply not true, as the hon. Member for Edinburgh West set out—we know that the special share will not protect the green purposes of the GIB under an owner such as Macquarie. In response to another written question I tabled, the Government made it clear that the special share will not ensure that individual investments are low-carbon. The special share will not stop asset stripping, will not ensure adequate capital is available for future investment and will not ensure an investment focus here in the UK. To protect the GIB as an enduring institution that is investing here in the UK, we ultimately and simply need the Government to stop this sell-off.
I thank the hon. Lady for giving way, and add my thanks to my hon. Friend the Member for Edinburgh West (Michelle Thomson) for her contribution in securing this debate. The whole basis behind the privatisation is that the market failure has been corrected. I simply do not agree with that. We may have seen progress in the power sector, but in transport and heat we are lagging way behind what we need to be doing to meet our carbon reduction targets. Does the hon. Lady agree that the Green Investment Bank can play a critical role in addressing the market failure that continues to exist in those sectors?
I thank the hon. Gentleman for his very informed contribution. He will not be surprised to hear that I entirely agree with him. Anybody who thinks that market failures have been corrected is being extraordinarily complacent. Just a quick scan of the way in which we are not meeting the targets that we have—our climate, environmental and energy-efficiency commitments—would lead people to conclude that market failure remains, and therefore that the need for the Green Investment Bank to be in the public domain remains.
I believe that Ministers have it within their power to cancel the sale and pursue a different path. For the GIB to be properly protected, it should remain wholly owned by the UK Government. That is my bottom line, but if Ministers refuse to do that, various other options are available to them. We know that there was and still is on the table an alternative bid—it is the one that lost out to Macquarie. That bid would help to keep the GIB British, green and growing, so why are Ministers not pursuing it if they do not want to keep the GIB in the public domain?
Is the hon. Lady aware of, and as concerned as I am about, potential conflicts of interest involved in the Macquarie bid? Macquarie has used PricewaterhouseCoopers both as advisers and as auditors for many years. The senior independent director of the GIB is Tony Poulter, who at the same time is a partner at PWC and the head of PWC’s global infrastructure advisory unit. Does she agree that that is an obvious conflict of interest?
I am grateful to the hon. Gentleman for that intervention. I was not aware of that, but as he has now put it on the table, I find yet another reason to be deeply concerned about the Government’s proposals. I thank him for adding that piece to the jigsaw.
There were plenty of options for the Government other than going down the route of flogging the GIB off to Macquarie. I mentioned the other bidder, but the Government could also allow citizens to buy into the Green Investment Bank through green bonds—allowing people up and down the country to own part of this important and dynamic institution. Indeed, there were press reports over the weekend, as the hon. Gentleman will know, about the possibility of an initial public offering. That would at least offer greater protection to the aims of the GIB than the Government’s current plan. Any sense that the sale is the only option on the table must be challenged. There is a range of options on the table. The overriding question has to be why the Government would choose such a damaging option when there are clearly much better ones available.
The launch of the Government’s industrial strategy on Monday gives Ministers another reason to halt the sale. This was the point made very clearly by the hon. Member for Waveney (Peter Aldous). With the UK set to miss its climate targets from the mid-2020s onwards, and renewables investment in the UK set to fall by a dramatic 95% over the next three years, the low-carbon economy should be at the heart of the industrial strategy.
The Department’s welcome new focus on battery technology, energy storage and grid technology could all be supported through finance from the Green Investment Bank. That finance is more important now than ever. We have already discussed briefly how the likely loss of access to funds from the European Investment Bank makes that an even more important role that the GIB can play.
Together, the emissions reduction plan due later this year and the Government’s more active approach to supporting the UK economy mean that it is time for Ministers to ditch the sale and embrace the Green Investment Bank as an important ally in a green industrial strategy. Ministers have rightly been applauded for passing into law the fifth carbon budget and for ratifying the Paris agreement. They would be similarly congratulated and applauded for putting an end to the flogging off of the Green Investment Bank.
We are in the unusual position of having run out of Back Benchers when I thought that we were going to run over our time. That gives the—
(7 years, 7 months ago)
Commons ChamberUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the sale of the Green Investment Bank.
The Government set out their plans for the sale of the Green Investment Bank in the document “Green Investment Bank: Sale of Shares” laid before Parliament on 3 March 2016. The Government intend to move the GIB into the private sector, so that it can increase its access to private capital and increase its green impact free from the constraints of Government ownership. Potential bidders are interested in the GIB precisely because of its green specialism. We are asking potential investors to confirm their commitment to GIB’s green values and investment principles, and how they propose to protect them, as part of their bids for the company. In addition, the Government have approved the creation of a special share, held by independent trustees, to protect GIB’s green purposes in future.
As I am sure the House will appreciate, the sale is commercially sensitive, so I cannot comment on the identity of any bidders or the discussions taking place between the Government and potential bidders. All parties have been required to sign confidentiality agreements that place strict restrictions on the disclosure of information. The restrictions apply both to bidders and the Government.
I thank the Minister for his reply, but it gives very little reassurance, given that everybody knows who the preferred bidder is. The preferred bidder, Macquarie, has a very, very worrying and dubious track record. I am putting this question today with support from across the House.
This week, we heard that the Green Investment Bank stands on the brink not just of being flogged off but broken up, with its green purposes discarded. Founded in 2012, the GIB has been widely recognised as a true success story, kick-starting truly innovative low-carbon projects across the UK, yet the preferred bidder—Macquarie—not only has a dismal and terrible environmental record but an appalling track record of asset stripping. So why have the Government given preferred bidder status to this company? What assessment have the Government made of Macquarie’s record, given that in 2005 the board of the London stock exchange deemed Macquarie unfit to conduct a takeover?
Furthermore, research this week uncovered changes to the GIB’s corporate structure. Between 22 November and 1 December, 10 new companies were incorporated and registered to the GIB’s London offices. The changes suggest that Macquarie is planning to fundamentally hollow out the GIB. Why have the 10 new companies been set up? Will the Minister confirm whether the changes made at the end of last year were made at the behest of Macquarie? Why are the Government setting up a structure to invite in a property asset stripper? If the GIB has been restructured in such a way as to allow it to be stripped of its assets, how can the Government guarantee that the special share, supposedly introduced to protect the future of the GIB, will have the intended effect?
Is this not exactly the wrong time to be selling off the GIB, given that the Government have decided to embark on a new industrial strategy, which must, to be in accord with our own climate change commitments, have low-carbon projects at its core? Finally, will the Minister admit that this selling off could lead to the bank being fatally undermined as an enduring institution? Will he stop the killing off of the Green Investment Bank? Will he halt the sale process with immediate effect?
As I think the hon. Lady knows, she has asked a stream of questions to which I cannot give direct answers. She will also know, being an experienced Member, that I cannot comment publicly on the identity of bidders or the process under way, for the reasons I elaborated at the start. She draws a lot of conclusions from media speculation, on which it would be irresponsible for me to comment, but I will try to give her some reassurance, flowing back to the objectives behind the sale that I set out in my answer. It is precisely because we want the GIB to be able to do more, unfettered by the constraints of the state, that we are seeking to put it into the private sector.
The objectives that we set out in the sale could not have been clearer and have been discussed in the House, and they include clear objectives around securing value for money for the taxpayer, which must be our primary responsibility. We want to ensure that the GIB can be reclassified to the private sector, but we have also been clear that we want to move it into the private sector to enable the business to grow and continue as an institution that supports investment in the green economy. We are selling it as a going concern, and potential investors would have to buy into the company’s green business plan and project pipeline. These are the criteria that we have set and against which we are evaluating the proposals before us.
(7 years, 9 months ago)
Commons ChamberMy hon. Friend is absolutely right. One of the changes that we have made, through the growth deals and local enterprise partnerships, has been to bring major investment in line with major infrastructure improvements.
I repeat the reassurance that I gave earlier to the shadow Minister, the hon. Member for Southampton, Test (Dr Whitehead), whom I should have welcomed to his brief. The Government remain committed to renewable energy and will be coming forward shortly with an announcement to prove that.
(7 years, 9 months ago)
Commons ChamberMy hon. Friend is absolutely right. This House has had good reason to be proud of the protections we have given workers in this country over the years. We do not need to rely on protections from the EU. We have inaugurated them in this House, and have a proud history of doing so over the years.
The Secretary of State just said that he would guarantee all protections. Will he absolutely confirm that that is going ahead of what the Government have said in the past—that it would only be “wherever practical”? Will he also rule out the idea of the great repeal Bill having a sunset clause that would mean that all EU law expired unless it had been specifically endorsed anew by the Government?
I will be very clear that all of the workers’ rights that are enjoyed under the EU will be part of that Bill and will be brought across into UK law. That is very clear. There is no intention of having a sunset clause.
The list is lengthy.
Let us go back. Who spent years attacking employment rights embodied in EU laws as unnecessary red tape before undergoing his recent makeover into an ally of the working class, insisting that it is only “consumer and environmental protections” that he regards as unnecessary? As an aside, it is worth emphasising that those protections are as important to the quality of life of working people as employment rights, but they are not the topic of today’s debate.
The hon. Gentleman is making a very strong case. Does he agree with me that what many workers value most of all is the right to work in other EU countries, and that the best way to guarantee that is by free movement? Will he therefore join me in pressing for free movement to be a fundamental right that needs cast-iron protection as part of any future relationship with the EU?
That is a very important point, and it is one to which I shall come back in the future.
Let me return to the issue at hand. While I welcome now, as I have before, the Government’s recent apparent Damascene conversion when it comes to workers’ rights, I cannot but remain sceptical about how deep it goes. When it comes to limiting the number of hours people have to work in a week and giving temporary workers the same rights as permanent staff, the Conservative party has resisted at every turn the enhanced protection for workers that was introduced through EU legislation. Yet now we are asked to believe that they will defend that legislation. How are the workers of this country supposed to trust them? The public have already been misled about what Brexit will mean.